Business, 26.08.2019 19:30 rederisbetter7637
What does keynes's liquidity preference theory predict about the relationship between interest rates and the velocity of money?
a. as interest rates rise, people will reduce their money holdings and therefore velocity will decrease.
b. as interest rates rise, people will increase their money holdings and therefore velocity will decrease.
c. as interest rates rise, people will reduce their money holdings and therefore velocity will rise.
d. as interest rates rise, people will increase their money holdings and therefore velocity will rise.
Answers: 3
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