In the Liquidity-Preference Model, an Increase in the Money Supply

question 4

Multiple Choice

In the liquidity-preference model, an increase in the money supply causes

• A)the nominal interest rate to increase and the equilibrium quantity of money to decrease.
• B)the nominal interest rate to increase and the equilibrium quantity of money to remain unchanged.
• C)the nominal interest rate to decrease and the equilibrium quantity of money to remain unchanged.
• D)the nominal interest rate to decrease and the equilibrium quantity of money to increase.

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Definitions:

Disarmament Talks

Diplomatic meetings aimed at reducing or eliminating certain types of weaponry, often involving multiple countries and international organizations.

Declared Independence

The formal assertion by a specific territory or group that it is independent and constitutes a state, no longer under the control or governance of a foreign power.

Heavily Industrialized

Pertains to regions or economies that are significantly developed in terms of manufacturing, factory operations, and industrial sector activities.

Internal Dialogue

The conversation within one's mind, reflecting on thoughts, feelings, and decisions, often used in literature to reveal a character's inner conflicts.