Economy, asked by anbujoshua1972, 5 months ago

explain the Keynesian theory of interest

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Answered by bannybannyavvari

Answer:

According to Keynes, the rate of interest is purely “a monetary phenomenon.” Interest is the price paid for borrowed funds. ... And interest is the reward for parting with liquidity. However, the rate of interest in the Keynesian theory is determined by the demand for money and supply of money.

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