According to the Theory of Liquidity Preference,a Decrease in Income

question 70

Multiple Choice

According to the theory of liquidity preference,a decrease in income will ______ interest rates,and according to the quantity equation (assuming velocity is not constant) ,a decrease in interest rates will ______ income.

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) decrease; increase

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Definitions:

Fault

A crack in the Earth's crust resulting from the displacement of one side with respect to the other, often associated with, or the result of, seismic activity.

Elastic Manner

Describes a response to deformation where a material returns to its original shape after the stress causing the deformation is removed.

Subduction Zone

A region on Earth where one tectonic plate moves under another, often causing earthquakes and volcanic activity.

Transform Boundary

A type of plate tectonic boundary where two plates slide past each other horizontally, commonly associated with earthquakes.