Keynes's Liquidity Preference Theory Indicates That the Demand for Money

question 43

Multiple Choice

Keynes's liquidity preference theory indicates that the demand for money

• A)is purely a function of income,and interest rates have no effect on the demand for money.
• B)is purely a function of interest rates,and income has no effect on the demand for money.
• C)is a function of both income and interest rates.
• D)is a function of both government spending and income.

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Definitions:

Quine

An American philosopher and logician known for his contributions to the philosophy of language, epistemology, and ontology, particularly his thesis of the indeterminacy of translation.

Presuppositions

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Ideas that we are born with, which may include tendencies to think in certain ways that are hardwired into our minds.

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