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According to Liquidity Preference Theory, an Increase in Money Demand

Question 47

Multiple Choice

According to liquidity preference theory, an increase in money demand for some reason other than a change in the price level causes


A) the interest rate to fall, so aggregate demand shifts right.
B) the interest rate to fall, so aggregate demand shifts left.
C) the interest rate to rise, so aggregate demand shifts right.
D) the interest rate to rise, so aggregate demand shifts left.

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