According to Liquidity Preference Theory, Investment Spending Would Rise If

question 132

Multiple Choice

According to liquidity preference theory, investment spending would rise if the price level

• A)fell, making the interest rate rise.
• B)fell, making the interest rate fall.
• C)rose, making the interest rate rise.
• D)rose, making the interest rate fall.

---

Definitions:

Supply Shortages

A situation where the demand for a product or service exceeds the available supply, often leading to increased prices and scarcity.

Price Increases

A rise in the cost of goods or services, often due to factors like inflation, increased production costs, or higher demand.

Local Nuances

Pertains to the subtle and specific features or variations within a local context or culture, often crucial for understanding and operating effectively within that locale.

Host Country

A country in which an international business operates.