According to Liquidity Preference Theory

question 33

Multiple Choice

According to liquidity preference theory,

• A)an increase in the interest rate reduces the quantity of money demanded.This is shown as a movement along the money-demand curve.An increase in the price level shifts money demand to the right.
• B)an increase in the interest rate increases the quantity of money demanded.This is shown as a movement along the money-demand curve.An increase in the price level shifts money demand leftward.
• C)an increase in the price level reduces the quantity of money demanded.This is shown as a movement along the money-demand curve.An increase in the interest rate shifts money demand rightward.
• D)an increase in the price level increases the quantity of money demanded.This is shown as a movement along the money-demand curve.An increase in the interest rate shifts money demand leftward.

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Definitions:

Supply Chain

The network between a company and its suppliers to produce and distribute a specific product to the final buyer, encompassing all stages of processing and shipping.

Inventories

Stocks of goods and materials that a company holds for the purpose of resale or production.

Inventory

The total quantity of goods and materials held in stock by a business, warehouse, or retail location.

Overstocking

The practice of holding more inventory than is necessary, often leading to excess stock that is difficult to sell.