Multiple Choice
According to the liquidity-preference theory, how does an increase in the price level affect the interest rate?
A) It increases the money demand and the interest rate.
B) It lowers the money demand and the interest rate.
C) It increases the money demand and lowers the interest rate.
D) It lowers the money demand and increases the interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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