According to Liquidity-Preference Theory,when Would the Money-Supply Curve Shift Right

question 86

Multiple Choice

According to liquidity-preference theory,when would the money-supply curve shift right?

• A) if government spending increased
• B) only if the Bank of Canada chose to increase the money supply
• C) if the interest rate increased
• D) if the price level fell or the interest rate decreased

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Definitions:

Theory of Relativity

A fundamental principle formulated by Albert Einstein that describes the laws of physics as the same for all non-accelerating observers and the speed of light within a vacuum as the same no matter the speed at which an observer travels.

Industrial Psychology

A field of psychology that applies psychological theories and principles to organizations and the workplace environment.

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The ability of an open system to maintain a steady state by adapting to changes in its environment.

Throughput

The rate at which input is processed into output in a system, often used in discussing efficiency in production and computer networks.