According to Liquidity Preference Theory,if the Price Level

question 44

Multiple Choice

According to liquidity preference theory,if the price level

• A)fell,the interest rate would rise,and induce investment spending to rise.
• B)fell,the interest rate would fall,and induce investment spending to fall.
• C)rose,the interest rate would rise,and induce investment spending to fall.
• D)rose,the interest rate would fall,and induce investment spending to rise.

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Definitions:

Sensitivity

The degree to which a system's output depends on the input or how changes in input can affect the output in modeling and analysis.

Subjectivity

Subjectivity pertains to how someone's judgment is shaped by personal opinions and feelings instead of external facts or evidence.

Centre-of-Gravity

A method in location analysis that finds the best location for a facility based on minimizing transportation costs, taking into account the geographical distribution of supply and demand.

Tonnes

A metric unit of mass equal to 1,000 kilograms or approximately 2,204.6 pounds.