Question

related to
Keynes's liquidity preference theory indicates that the demand for money is
कीन्स की तरलता वरीयता सिद्धांत इंगित करता है कि पैसे की मांग से संबंधित है।
Select one:
OA. negatively; income
नकारात्मक; आय
OB. negatively; interest rates
नकारात्मक; ब्याज दर
O C. negatively; wealth
नकारात्मक; धन
OD. positively; interest rates
सकारात्मक; ब्याज दर​

Answer 1

Answer:

Liquidity Preference Theory is a model that suggests that an investor should demand a higher interest rate or premium on securities with long-term maturities that carry greater risk because, all other factors being equal, investors prefer cash or other highly liquid holdings.

KEY TAKEAWAYS

Liquidity Preference Theory refers to money demand as measured through liquidity.

John Maynard Keynes mentioned the concept in his book The General Theory of Employment, Interest, and Money (1936), discussing the connection between interest rates and supply-demand.

In real-world terms, the more quickly an asset can be converted into currency, the more liquid it becomes.