Someone please help me economics problems?

Posted on 2014-12-24 05:07:00 in Economics by MIKE

A) Explain the theory of liquidity preference and the theory of loanable funds.

B) According to the theory of liquidity preference, what happens to the income and interest rate when money supply is increased?

C) According to the theory of loanable funds, what happens to the income and the intrerest rate when money supply is increased?

D) how do you explain the difference btw C) and D)

E) If price are perfectly flexible so that 10% increase in money supply brings about immediate 10% increase in price level, would the result in B) still hold true?

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