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Changes in Equilibrium Interest Rates in the Liquidity Preference Framework 1 In the Keynesian liquidity preference framework an increase in the interest rate causes the demand curve for money to

Changes in Equilibrium Interest Rates in the Liquidity Preference Framework

1) In the Keynesian liquidity preference framework, an increase in the interest rate causes the demand curve for money to ________, everything else held constant.

A) shift right

B) shift left

C) stay where it is

D) invert

2) A lower level of income causes the demand for money to ________ and the interest rate to ________, everything else held constant.

A) decrease; decrease

B) decrease; increase

C) increase; decrease

D) increase; increase

3) When real income ________, the demand curve for money shifts to the ________ and the interest rate ________, everything else held constant.

A) falls; right; rises

B) rises; right; rises

C) falls; left; rises

D) rises; left; rises

Jun 18 2020 View more View Less

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