According to the Liquidity Preference Model

question 115

Multiple Choice

According to the liquidity preference model:

• A) an increase in the money supply lowers the equilibrium rate of interest.
• B) a decrease in the money supply lowers the equilibrium rate of interest.
• C) the money supply curve is a horizontal line.
• D) the demand for money curve is a vertical line.

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Definitions:

Encoding

Encoding is the initial process of converting information into a form that can be stored in memory, involving the transformation of sensory input into a meaningful memory.

Implicit Memory

This is a type of long-term memory that enables people to perform tasks without conscious awareness of these previous experiences.

Echoic Memory

A subcategory of sensory memory that specifically stores auditory information, allowing sounds to be retained for brief periods following the cessation of auditory stimuli.

Sensory Memory

The shortest-term element of memory, it allows the ability to retain impressions of sensory information after the original stimuli have ended.