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.

---

Definitions:

Thermocouples

Sensing devices used to measure temperature, consisting of two dissimilar metal wires joined at one end, producing a voltage proportional to temperature difference.

Reed Relay

A type of relay that uses a pair of magnetic reeds as the switching mechanism, often enclosed in a glass tube to protect against external magnetic fields and contaminants.

Permanent Magnet

A material that maintains a constant magnetic field without the need for electrical power.

Resistance Temperature Detector

A sensor used to measure temperature by correlating the resistance of the RTD element with temperature.