Question: Using the liquidity preference framework, an increase in the riskiness of bonds will cause: A . a decrease in the demand for money, no change

Using the liquidity preference framework, an increase in the riskiness of bonds will cause:

.

a decrease in the demand for money, no change in the quantity of money, and a higher interest rate.

.

an increase in the demand for money, no change in the quantity of money, and a lower interest rate.

.

a decrease in the demand for money, no change in the quantity of money, and a lower interest rate.

.

an increase in the demand for money, no chang in the quantity of money, and a higher interest rate.

From the graph, we see that a rise in the riskiness of bonds will cause the interest rate in the liquidity preference framework to increase and cause the interest rate in the bond market to

decrease

Using the liquidity preference framework, an

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