According to Liquidity-Preference Theory, Other Things Being Equal, What Does

question 57

Multiple Choice

According to liquidity-preference theory, other things being equal, what does a higher price level lead households to do in the short run?

• A) increase residential investment
• B) decrease the amount of cash they want to hold
• C) buy bonds
• D) decrease consumption

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Definitions:

Circular

Shaped like a circle or having a circular motion; in reasoning, an argument that assumes what it is trying to prove.

Cereal Grass

Grasses cultivated for their edible grains, such as wheat, rice, and corn.

Orange-Colored

Having the color that is a combination of red and yellow.

Negative Terms

Words or phrases that express denial, disagreement, or opposition, often used to describe the absence or opposite of something positive.