According to the Theory of Liquidity Preference,if Output Decreases

question 119

Multiple Choice

According to the theory of liquidity preference,if output decreases

• A)people want to hold more money.This response is shown as a movement along the money demand curve.
• B)people want to hold more money.This response is shown as a shift of the money demand curve.
• C)people want to hold less money.This response is shown as a movement along the money demand curve.
• D)people want to hold less money.This response is shown as a shift of the money demand curve.

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Definitions:

Current Cost

The cost to replace an asset or inventory at current market prices, differing from historical cost which is the original cost at the time of purchase.

Historical Cost

An accounting principle that assets should be recorded and valued at their original purchase cost.

Future Sacrifice

An expected loss of economic benefits due to commitments or obligations a business has entered into.

Liability

A financial obligation or debt owed by a business to another entity, typically due for repayment in the future.