Multiple Choice
Different theories of the interest rate are useful for different purposes. When thinking about the long-run determinants of interest rates, it is best to keep in mind:
A) the loanable funds theory.
B) the liquidity preference theory.
C) the classical economic theory.
D) the price level theory.
Correct Answer:
Verified
Correct Answer:
Verified
Q12: A tax change is a determinant of
Q13: Suppose that the government spends more on
Q14: John Maynard Keynes's liquidity preference theory suggests
Q15: Briefly discuss the theory of liquidity preference.
Q20: The multiplier effect means that aggregate demand
Q21: When the government cuts personal income taxes,
Q22: The opportunity cost of holding money is
Q29: Explain the logic according to liquidity preference
Q52: What is the difference between monetary policy
Q171: Explain why the interest rate is the