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According to Keynes’s liquidity preference theory, what determines the interest rate?

Correct answer B. The supply and demand for money

Explanation

Liquidity preference theory says the interest rate adjusts to balance the quantity of money people wish to hold with the money supply set by the central bank.

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According to Keynes’s liquidity preference theory, what determines the interest rate?

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According to Keynes’s liquidity preference theory, what determines the interest rate?

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