Multiple Choice
According to liquidity-preference theory, if the price level decreases, in which direction does the demand curve shift and how does the interest rate change?
A) The demand curve shifts right, so the interest rate increases.
B) The demand curve shifts right, so the interest rate decreases.
C) The demand curve shifts left, so the interest rate decreases.
D) The demand curve shifts left, so the interest rate increases.
Correct Answer:
Verified
Correct Answer:
Verified
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