Multiple Choice
According to liquidity preference theory, if there were a shortage of money, then
A) the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium.
B) the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium.
C) the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium.
D) the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.
Correct Answer:
Verified
Correct Answer:
Verified
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