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