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Keynes's liquidity preference theory indicates that the demand for money is ____.
A) constant
B) positively related to interest rates
C) negatively related to interest rates
D) negatively related to bond values
Answer: C
Diff: 2 Type: MC Page Ref: 534
Skill: Recall
Objective List: 21.2 Define the theories of the demand for money
Keynes's model of the demand for money suggests that velocity is ____ related to
____.
A) positively; interest rates
B) negatively; interest rates
C) positively; bond values
D) positively; stock prices
Answer: A
Diff: 2 Type: MC Page Ref: 534
Skill: Recall
Objective List: 21.2 Define the theories of the demand for money
Keynes's liquidity preference theory indicates that the demand for money is ____
related to ____.
A) negatively; interest rates
B) positively; interest rates
C) negatively; income
D) negatively; wealth
Answer: A
Diff: 2 Type: MC Page Ref: 533
Skill: Recall
Objective List: 21.2 Define the theories of the demand for money
The Keynesian demand for real balances can be expressed as ____.
A) Md = f(i,Y)
B) Md/P = f(i)
C) Md/P = f(Y)
D) Md/P = f(i,Y)
Answer: D
Diff: 2 Type: MC Page Ref: 534
Skill: Recall
Objective List: 21.2 Define the theories of the demand for money