Multiple Choice
According to liquidity-preference theory, if the price level increases, how do the equilibrium interest rate and the aggregate quantity of goods change?
A) The interest rate and the quantity demanded rise.
B) The interest rate rises and the quantity demanded falls.
C) The interest rate falls and the quantity demanded rises.
D) The interest rate and the quantity demanded fall.
Correct Answer:
Verified
Correct Answer:
Verified
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