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According to Liquidity-Preference Theory, If the Quantity of Money Supplied

Question 29

Multiple Choice

According to liquidity-preference theory, if the quantity of money supplied is greater than the quantity demanded, what will happen to the interest rate and the quantity of money demanded?


A) The interest rate will increase, and the quantity of money demanded will decrease.
B) The interest rate will increase, and the quantity of money demanded will increase.
C) The interest rate will decrease, and the quantity of money demanded will decrease.
D) The interest rate will decrease, and the quantity of money demanded will increase.

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