In the Simple Liquidity Preference Model, Changes to the Money

question 40

Multiple Choice

In the simple liquidity preference model, changes to the money supply will have a smaller effect on interest rates the:

• A) flatter, more elastic is the money demand curve.
• B) flatter, less elastic is the money demand curve.
• C) steeper, more elastic is the money demand curve.
• D) steeper, less elastic is the money demand curve.

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Definitions:

Presentment

The formal presentation of a document such as a check or bill of exchange for payment or acceptance.

Negotiable Instrument

A document that ensures the payment of a specified sum of money, either upon request or at an established date, with the payer's name indicated on it.

Presentment Warranties

Guarantees made by the presenter of a negotiable instrument, such as a check, regarding the legitimacy and authority to transfer the instrument.

Liability

The state of being responsible for something, especially in terms of legal or financial obligations.