According to Liquidity Preference Theory,a Decrease in the Price Level

question 22

Multiple Choice

According to liquidity preference theory,a decrease in the price level shifts the

• A)money demand curve rightward,so the interest rate increases.
• B)money demand curve rightward,so the interest rate decreases.
• C)money demand curve leftward,so the interest rate decreases.
• D)money demand curve leftward,so the interest rate increases.

---

Definitions:

Project

A temporary endeavor undertaken to create a unique product, service, or result, characterized by specific objectives and resources.

Pretax Return

The profit a company generates before any taxes are deducted, often used to analyze the profitability of core business activities.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used to assess the profitability of an investment.

Salvage Value

The estimated monetary value of an asset at the cessation of its useful duration.