In the Keynesian framework, determination of an equilibrium interest rate also implies (A) the rate that equates the supply of and the demand for bonds. (B) the rate that equates the supply of money with the demand for money. (C) the rate that equates the supply of money and demand for investment. (D) the rate that equates supply of labour and demand for labour.
Tap an option to check your answer.
Checking your account…
Demand for money and monetary theories has come up 82 times in 7 exams since 2005.
This question is on Keynesian liquidity preference, part of Demand for money and monetary theories in Macroeconomics.
Why people hold money: the transactions, precautionary and speculative motives and the link to interest rates.
TestStop has 25 past-paper questions on this subtopic.
Question from the CUET-PG 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.