Multiple Choice
According to liquidity preference theory,
A) an increase in the interest rate reduces the quantity of money demanded.This is shown as a movement along the curve.An increase in the price level shifts money demand right.
B) an increase in the interest rate increases the quantity of money demanded.This is shown as a movement along the curve.An increase in the price level shifts money demand left.
C) an increase in the price level reduces the quantity of money demanded.This is shown as a movement along the curve.An increase in the interest rate shifts money demand right.
D) an increase in the price level increases the quantity of money demanded.This is shown as a movement along the curve.An increase in the interest rate shifts money demand left.
Correct Answer:
Verified
Correct Answer:
Verified
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