The Liquidity Effect Is the

Multiple Choice

The liquidity effect is the

A) increase in the interest rate brought on by an increase in GDP.
B) increase in the interest rate due to a higher expected inflation rate.
C) decrease in the interest rate due to an increase in the supply of loanable funds.
D) response,in terms of rate of flow,of the money supply to a change in government spending.
E) rate of change in the price level caused by a change in the supply of money.