Multiple Choice
Which of the following statements is correct?
A) Both liquidity preference theory and classical theory assume the interest rate adjusts to bring the money market into equilibrium.
B) Both liquidity preference theory and classical theory assume the price level adjusts to bring the money market into equilibrium.
C) Liquidity preference theory assumes the interest rate adjusts to bring the money market into equilibrium;classical theory assumes the price level adjusts to bring the money market into equilibrium.
D) Liquidity preference theory assumes the price level adjusts to bring the money market into equilibrium;classical theory assumes the interest rate adjusts to bring the money market into equilibrium.
Correct Answer:
Verified
Correct Answer:
Verified
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