On the Graph That Depicts the Theory of Liquidity Preference

question 113

Multiple Choice

On the graph that depicts the theory of liquidity preference,

• A)the demand-for-money curve is vertical.
• B)the supply-of-money curve is vertical.
• C)the interest rate is measured along the horizontal axis.
• D)the price level is measured along the vertical axis.

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Definitions:

Sample Correlation Coefficient

A measure that indicates the degree to which two variables are linearly related in a sample dataset.

Level Of Significance

The likelihood of incorrectly dismissing the null hypothesis in a statistical analysis, commonly symbolized by alpha (α), when it is in fact correct.

Null Hypothesis

A statement or assumption in a hypothesis test that there is no significant effect or difference, to be tested against the alternative hypothesis.

Scatterplot

A graph in which the values of two variables are plotted along two axes, the pattern of the resulting points revealing any correlation present.