The Influence Of Monetary Policy On Aggregate Demand

Question 1

What is the theory of liquidity preference

Answer 1

It is Keynes theory, stating that the interest rate adjusts to bring money supply and money demand into balance.

Question 2

Any assets liquidity refers to the ease with which that asset can be converted into a medium of exchange.
A. True
B. False

Answer 2

True

Question 3

According to the theory of liquidity preference, the interest rate adjusts to balance the supply and demand for money.
A. True
B. False

Answer 3

True

Question 4

The one important factor that shifts the aggregate-demand curve is monetary policy.
A. True
B. False

Answer 4

True