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In His Liquidity Preference Framework,Keynes Assumed That Money Has a Zero

question 18

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In his liquidity preference framework,Keynes assumed that money has a zero rate of return; thus,when interest rates ________ the expected return on money falls relative to the expected return on bonds,causing the demand for money to ________.


Definitions:

Equilibrate

The process of achieving balance or stability within a system, particularly in the context of cognitive development as described by Jean Piaget.

Piaget

A psychologist known for his theory of cognitive development that describes how children's intellect grows through stages.

Logically

In a manner that is based on clear, sound reasoning or the formal principles of reasoning.

Egocentrically

Thinking primarily about oneself without regard for the feelings or views of others; seeing things from one's own perspective only.

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