According to liquidity preference theory, what shape is the money supply curve?
A)upward sloping
B)downward sloping
C)vertical
D)horizontal

Name: According to liquidity preference theory, what shape is the money supply curve? A)upward sloping B)downward sloping C)vertical D)horizontal
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Question

Quizplus · Accepted Answer

According to liquidity preference theory, the money supply curve is vertical because it is determined by the central bank and is not affected by the interest rate.

According to Liquidity Preference Theory, What Shape Is the Money