According to the Theory of Liquidity Preference

question 45

Multiple Choice

According to the theory of liquidity preference,

• A)if the interest rate is below the equilibrium level,then the quantity of money people want to hold is less than the quantity of money the Fed has created.
• B)if the interest rate is above the equilibrium level,then the quantity of money people want to hold is greater than the quantity of money the Fed has created.
• C)the demand for money is represented by a downward-sloping line on a supply-and-demand graph.
• D)All of the above are correct.

---

Definitions:

Constructive Fraud

Conduct that is treated as fraud under the law even when there is no proof of intent to defraud, usually because of the existence of a special relationship or fiduciary duty.

Fraudulent Intent

The deliberate intention to deceive another party for unlawful gain or to deprive a victim of a legal right.

Privity

The relationship between parties that are legally participating in the same transaction or agreement.

Accountant Negligence

A situation where an accountant fails to perform their duties with the required level of care and accuracy, leading to financial loss.