According to liquidity preference theory, a decrease in the price level causes the interest rate to
a. increase, which increases the quantity of goods and services demanded.
b. increase, which decreases the quantity of goods and services demanded.
c. decrease, which increases the quantity of goods and services demanded.
d. decrease, which decreases the quantity of goods and services demanded.
c
You might also like to view...
Refer to the figure above. When the demand curve for flash drives is D and the supply curve of flash drives is S1, the equilibrium quantity is:
A) 10 units. B) 20 units. C) 40 units. D) 60 units.
Cole was discussing the market for cocoa beans with his friend John Schmidt
Cole said, "Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years, the price of cocoa beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.
When total revenue and price are inversely related, demand is
A) unit-elastic. B) inelastic. C) elastic. D) not related.
According to the information in the table shown, if someone were earning $30,000 in the United States, approximately what would they have to earn in China to have the same standard of living?
This table shows the price-level adjustment as compared to the United States.
A. $40,000
B. $7,500
C. $22,500
D. $15,000