According to the liquidity preference theory, borrowers should pay a higher interest rate for long-term borrowing than for short-term borrowing.

Name: According to the liquidity preference theory, borrowers should pay a higher interest rate for long-term borrowing than for short-term borrowing.
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The liquidity preference theory suggests that lenders prefer to lend for shorter periods, so they require higher interest rates for longer-term loans to compensate for the increased risk and reduced liquidity.

According to the Liquidity Preference Theory, Borrowers Should Pay a Higher