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

Name: According to liquidity preference theory, the money-supply curve is 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 is determined by the central bank and is independent of the interest rate, making the money-supply curve vertical.

According to Liquidity Preference Theory, the Money-Supply Curve Is