Assume the Money Market Is Initially in Equilibrium

question 28

Multiple Choice

Assume the money market is initially in equilibrium.If the price level increases,then according to liquidity preference theory there is an excess

• A)supply of money until the interest rate increases.
• B)supply of money until the interest rate decreases.
• C)demand for money until the interest rate increases.
• D)demand for money until the interest rate decreases.

---

Definitions:

Stimulus Control

A behavior modification technique that involves altering the environment to reduce cues that encourage negative behaviors and enhance cues that promote positive behaviors.

Behavior Change

A modification in an individual's actions, habits, or attitudes often aimed at achieving a particular outcome or goal.

Response

The act of replying or reacting to something, often used in the context of communication, feedback, or the body's reaction to stimuli.

Detrimental

Anything that causes damage, harm, or undesirable adverse effects.