According to the Liquidity Preference Theory, an Increase in the Overall

question 140

Multiple Choice

According to the liquidity preference theory, an increase in the overall price level of 10 percent

• A)increases the equilibrium interest rate, which in turn decreases the quantity of goods and services demanded.
• B)decreases the equilibrium interest rate, which in turn increases the quantity of goods and services demanded.
• C)increases the quantity of money supplied by 10 percent, leaving the interest rate and the quantity of goods and services demanded unchanged.
• D)decreases the quantity of money demanded by 10 percent, leaving the interest rate and the quantity of goods and services demanded unchanged.

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Definitions:

Stable External

Refers to external conditions or factors that remain consistent and unchanging over time, affecting individuals or environments in a predictable manner.

Internal Attribution

The process of explaining one's own behavior or the behavior of others by attributing causes to internal characteristics or dispositions.

Noncausal Attribution

The assignment of a cause to an event or behavior without evidence of a direct cause-and-effect relationship.

External Attribution

The process of attributing the cause of one's own or others' behavior to external factors or situations.