Question

The Liquidity preference theory of the rate of interest is a a) Flow theory b) Stock theory c) None of the above​

Answer 1

Answer:

Explanation:

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.

Answer 2

Answer:

Flow theory is the right answer