Question: According to liquidity preference theory, what will be the result of a reduction in the price of bonds?
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a.a decrease in the supply of money
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b.a fall in interest rates
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c.an increase in the demand for money
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d.a reduction in the quality of money demanded
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e.None of these
Answer: d
 a decrease in the supply of money b) a fall in interest rates c) an increase in the demand for money d) a reduction in the quality of money demanded e) None of these Ans. d) a reduction in the quality of money demanded
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