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Supply and Demand in the Market for Money The Liquidity Preference Framework 1 In Keynes"s liquidity preference framework individuals are assumed to hold their wealth in two forms

Supply and Demand in the Market for Money: The Liquidity Preference Framework

1) In Keynes"s liquidity preference framework, individuals are assumed to hold their wealth in two forms:

A) real assets and financial assets.

B) stocks and bonds.

C) money and bonds.

D) money and gold.

2) In Keynes"s liquidity preference framework,

A) the demand for bonds must equal the supply of money.

B) the demand for money must equal the supply of bonds.

C) an excess demand of bonds implies an excess demand for money.

D) an excess supply of bonds implies an excess demand for money.

3) In Keynes"s liquidity preference framework, if there is excess demand for money, there is

A) excess demand for bonds.

B) equilibrium in the bond market.

C) excess supply of bonds.

D) too much money.

Jun 18 2020 View more View Less

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