Multiple Choice
In the liquidity-preference model, if the nominal interest rate is higher than the equilibrium interest rate
A) both bond prices and nominal interest rate will eventually fall.
B) both bond prices and nominal interest rate will eventually rise further
C) bond prices will fall and nominal interest rate will eventually rise further
D) bond prices will rise and nominal interest rate will eventually fall.
Correct Answer:
Verified
Correct Answer:
Verified
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