The liquidity preference theory distinguishes between ________.
A)nominal and real quantities
B)money and financial assets
C)buying goods and earning interest income
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The liquidity preference theory, proposed by John Maynard Keynes, distinguishes between nominal and real quantities, money and financial assets, and buying goods and earning interest income. It essentially explains the interest rates in terms of the supply and demand for money; the demand for money as an asset versus the desire to spend it on goods and services or to invest it for interest income.

The Liquidity Preference Theory Distinguishes Between ________