According to the theory of liquidity preference, which variable adjusts to balance the supply and demand for money?
a. interest rate
b. money supply
c. quantity of output
d. price level
a
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What does the vertical intercept of a production possibilities frontier represent?
What will be an ideal response?
Which of the following is not a potential problem in using corrective taxation to deal with a negative externality?
a. Measuring the cost of the externality. b. Estimating the supply curve of the externality creator. c. Determining who is responsible for the externality. d. Determining how the tax should be applied.
Human capital theory suggests that everyone's income reflects individual choices about investments in education and training
Indicate whether the statement is true or false
If the prices of all goods increase by the same proportion as income, the quantity demanded of good X will
a. decrease. b. increase. c. remain unchanged. d. change in a way that cannot be determined from the information given.