Author Question: According to liquidity preference theory, as real income increases, so does ________. A) the ... (Read 35 times)

amal · **on:** Jun 30, 2018

According to liquidity preference theory, as real income increases, so does ________.

A) the supply of real money balances
B) the demand for real money balances
C) the real interest rate
D) all of the above
E) none of the above

Question 2

The risk that a borrower has a greater understanding about their potential future behavior than a potential lender is known as ________.

A) the problem of adverse selection
B) the problem of moral hazard
C) ornamental torsion
D) the asymmetric innovation problem