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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Definitions:

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific time period, serving as a broad measure of economic activity.

Economy's Production

The total value of all goods and services produced within an economy over a specific time period.

Goods and Services

The physical items (goods) and activities (services) that satisfy human wants and needs and are offered in the marketplace for purchase.

GDP

Gross Domestic Product signifies the total monetary value of all goods and services produced within a country's boundaries over a predetermined time frame, reflecting the nation's economic health.