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    Exam 5: Understanding Interest Rates, Savings, and the Wealth Effect
  5. Question
    According to the Liquidity Preference Theory of Interest, the Interest
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According to the Liquidity Preference Theory of Interest, the Interest

Question 123

Question 123

True/False

According to the liquidity preference theory of interest, the interest rate is the "price" that must be paid to induce money holders to surrender a perfectly liquid asset.

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