Which of the Following Statements Is Correct

question 94

Multiple Choice

Which of the following statements is correct?

• A)Both liquidity preference theory and classical theory assume the interest rate adjusts to bring the money market into equilibrium.
• B)Both liquidity preference theory and classical theory assume the price level adjusts to bring the money market into equilibrium.
• C)Liquidity preference theory assumes the interest rate adjusts to bring the money market into equilibrium;classical theory assumes the price level adjusts to bring the money market into equilibrium.
• D)Liquidity preference theory assumes the price level adjusts to bring the money market into equilibrium;classical theory assumes the interest rate adjusts to bring the money market into equilibrium.

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