According to Liquidity Preference Theory, the Money-Supply Curve Would Shift

question 490

Multiple Choice

According to liquidity preference theory, the money-supply curve would shift if the Fed

• A) engaged in open-market operations.
• B) increased money demand.
• C) increase the real income.
• D) did any of the above.

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Definitions:

Multiaxial

Describing joints that allow movement around multiple axes and planes.

Saddle

A supportive structure for a rider or load, typically used on horses, bicycles, motorcycles, or other vehicles.

Hinge

A mechanical bearing that connects two solid objects, typically allowing a limited angle of rotation between them.

Pivot

A point of rotation or the act of rotating around a particular point, often used metaphorically to describe a shift in strategy or position.