The Theory of Liquidity Preference Implies That the Quantity of Real

question 53

Multiple Choice

The theory of liquidity preference implies that the quantity of real money balances demanded is:

• A) negatively related to both the interest rate and income.
• B) positively related to both the interest rate and income.
• C) positively related to the interest rate and negatively related to income.
• D) negatively related to the interest rate and positively related to income.

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Definitions:

Implausible

Lacking a sense of plausibility or credibility; unconvincing.

Informative

Providing useful or interesting information or data.

Patterns Of Explanation

Structured frameworks or methods used to elucidate how or why certain phenomena occur, aimed at enhancing understanding through logical reasoning.

Plausible

Appearing reasonable or probable.