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Loanable funds theory instead examines saving supplied and borrowing demanded to determine the interest rate."},{"text":"The foreign exchange market.","correct":false,"explanation":"The foreign exchange market determines exchange rates between currencies. Loanable funds theory focuses on the interaction between saving and borrowing."},{"text":"The labour market.","correct":false,"explanation":"The labour market determines wages and employment through labour demand and supply. The relevant market here is the one linking savers with borrowers."}]},{"id":"4b0f5cb4-e2d6-433b-8c76-ac220350ff16","cardType":"basic","points":1,"front":"What market does Keynesian liquidity preference theory analyse?","back":"The money market.","mcqOptions":[{"text":"The money market.","correct":true,"explanation":"Keynesian liquidity preference theory explains how the demand for money interacts with the supply of money, determining the interest rate in the money market."},{"text":"The market for loanable funds.","correct":false,"explanation":"This is the market analysed by loanable funds theory. Keynesian liquidity preference theory instead examines money demand and money supply."},{"text":"The foreign exchange market.","correct":false,"explanation":"Foreign exchange analysis concerns the buying and selling of currencies and exchange-rate determination. Keynesian liquidity preference theory focuses on money holdings and interest rates."},{"text":"The market for goods and services.","correct":false,"explanation":"This market is analysed when explaining output, demand and prices for products. Liquidity preference theory instead analyses the market for money."}]},{"id":"60da7df5-e59e-4c68-8ba1-9806f3719e4a","cardType":"basic","points":2,"front":"What determines the equilibrium interest rate in loanable funds theory?","back":"The rate where the quantity of saving equals the quantity borrowed.","mcqOptions":[{"text":"The rate where the quantity of saving equals the quantity borrowed.","correct":true,"explanation":"Equilibrium occurs when the amount supplied by savers matches the amount demanded by borrowers, so there is neither excess saving nor excess borrowing."},{"text":"The rate where the quantity of saving exceeds the quantity borrowed.","correct":false,"explanation":"Saving exceeding borrowing creates a surplus of loanable funds, putting downward pressure on the interest rate until the two quantities become equal."},{"text":"The rate where the quantity of borrowing exceeds the quantity saved.","correct":false,"explanation":"Excess borrowing creates a shortage of loanable funds, pushing the interest rate upward until borrowing and saving are brought into equality."},{"text":"The rate where the quantity of saving is unrelated to the quantity borrowed.","correct":false,"explanation":"Loanable funds equilibrium depends directly on matching supply and demand. Ignoring that relationship cannot explain how the market interest rate is determined."}]},{"id":"bd89c0db-8ac1-4723-9d80-74f57f2e188c","cardType":"basic","points":2,"front":"What determines the equilibrium interest rate in Keynesian liquidity preference theory?","back":"The rate where money demand equals money supply.","mcqOptions":[{"text":"The rate where money demand equals money supply.","correct":true,"explanation":"In liquidity preference theory, the equilibrium interest rate is found where people’s desire to hold money matches the quantity of money provided."},{"text":"The rate where saving equals investment.","correct":false,"explanation":"Saving and investment equality is associated with the loanable funds approach. Keynesian liquidity preference theory instead matches money demand with money supply."},{"text":"The rate where exports equal imports.","correct":false,"explanation":"Exports equalling imports concerns external trade and the balance of trade, not monetary equilibrium. The Keynesian money market matches desired and supplied money."},{"text":"The rate where tax revenue equals government spending.","correct":false,"explanation":"This describes a balanced government budget, which does not determine the money-market interest rate. Liquidity preference theory uses money demand and money supply."}]},{"id":"fd089d9f-a2ed-46a9-8abd-9307c8381c6b","cardType":"basic","points":2,"front":"Why does the supply of loanable funds rise when the interest rate increases?","back":"A higher interest rate provides a higher return on saving, encouraging more saving.","mcqOptions":[{"text":"A higher interest rate provides a higher return on saving, encouraging more saving.","correct":true,"explanation":"A greater reward for postponing consumption makes saving more attractive, so households are generally willing to supply more loanable funds."},{"text":"A higher interest rate provides a lower return on saving, discouraging more saving.","correct":false,"explanation":"This reverses the incentive effect: a higher interest rate raises, rather than lowers, the reward for saving and therefore encourages a greater supply of funds."},{"text":"A higher interest rate provides a higher cost of saving, encouraging more saving.","correct":false,"explanation":"The interest rate is the return received by savers, not normally a cost of saving. Its higher reward encourages saving through increased opportunity benefit."},{"text":"A higher interest rate provides a higher return on borrowing, encouraging more saving.","correct":false,"explanation":"Borrowers pay interest, while savers receive it. The supply response comes from a higher return to saving, not from a supposed return earned by borrowers."}]},{"id":"1abca405-4341-41d2-8087-10a281fd4625","cardType":"basic","points":2,"front":"Why does demand for loanable funds fall when the interest rate increases?","back":"Higher borrowing costs make fewer investment projects profitable.","mcqOptions":[{"text":"Higher borrowing costs make fewer investment projects profitable.","correct":true,"explanation":"When interest rates rise, firms face greater financing costs. Projects that previously earned enough to cover those costs may no longer generate an acceptable return."},{"text":"Higher borrowing costs make more investment projects profitable.","correct":false,"explanation":"Higher financing costs reduce the expected net return from investment, so fewer projects meet firms’ profitability requirements rather than more."},{"text":"Higher borrowing costs make fewer saving plans profitable.","correct":false,"explanation":"This confuses savers with investors. The relevant effect is that expensive borrowing makes fewer business investment projects worthwhile."},{"text":"Higher borrowing costs make all investment projects equally profitable.","correct":false,"explanation":"Interest-rate changes affect projects differently according to their expected returns. Higher costs usually eliminate the least profitable projects first, rather than equalising returns."}]},{"id":"46e3f9f5-3373-4ece-9852-67d053380397","cardType":"basic","points":2,"front":"What happens to the loanable funds interest rate when saving increases?","back":"Supply shifts right, so the equilibrium interest rate falls.","mcqOptions":[{"text":"Supply shifts right, so the equilibrium interest rate falls.","correct":true,"explanation":"More saving increases the supply of loanable funds. With demand unchanged, the greater availability of funds creates downward pressure on the equilibrium interest rate."},{"text":"Supply shifts right, so the equilibrium interest rate rises.","correct":false,"explanation":"A rightward supply shift increases fund availability and creates downward, not upward, pressure on price. Here the price of loanable funds is the interest rate."},{"text":"Supply shifts left, so the equilibrium interest rate rises.","correct":false,"explanation":"More saving expands supply, so it shifts the curve right. A leftward shift would represent reduced saving and would tend to raise the interest rate."},{"text":"Supply remains unchanged, so the equilibrium interest rate is unchanged.","correct":false,"explanation":"An increase in saving directly increases the funds available for lending, shifting supply. Holding supply constant ignores the mechanism producing the interest-rate change."}]},{"id":"3199c177-74a9-4afd-9e35-a628e2985e64","cardType":"basic","points":2,"front":"What happens to the loanable funds interest rate when government borrowing increases heavily?","back":"Demand shifts right, so the interest rate rises.","mcqOptions":[{"text":"Demand shifts right, so the interest rate rises.","correct":true,"explanation":"Heavy government borrowing adds to demand for loanable funds. With supply unchanged, stronger competition for funds raises the equilibrium interest rate."},{"text":"Demand shifts right, so the interest rate falls.","correct":false,"explanation":"A rightward demand shift means borrowers seek more funds, increasing competition for a fixed supply. This puts upward rather than downward pressure on the interest rate."},{"text":"Demand shifts left, so the interest rate falls.","correct":false,"explanation":"Increased government borrowing expands demand, so the demand curve shifts right. A leftward shift would indicate reduced borrowing and would lower the rate."},{"text":"Supply shifts right, so the interest rate falls.","correct":false,"explanation":"Government borrowing changes demand for funds, not their supply. A rightward supply shift would describe increased saving and would lead to a lower rate."}]},{"id":"47c51bdc-b90d-44b4-acb7-7a746475314d","cardType":"basic","points":1,"front":"What is crowding out?","back":"Heavy government borrowing raises interest rates and reduces private-sector investment.","mcqOptions":[{"text":"Heavy government borrowing raises interest rates and reduces private-sector investment.","correct":true,"explanation":"Crowding out occurs when government borrowing increases demand for loanable funds, pushing up interest rates and making borrowing more expensive for private-sector firms."},{"text":"Heavy government borrowing lowers interest rates and increases private-sector investment.","correct":false,"explanation":"This reverses the usual loanable-funds effect: increased government borrowing raises demand for funds, so interest rates rise and private investment is reduced."},{"text":"Heavy government borrowing raises interest rates and increases private-sector investment.","correct":false,"explanation":"The higher interest rate is correctly identified, but the consequence is reversed. More expensive borrowing normally discourages firms from undertaking private investment."},{"text":"Heavy government borrowing lowers interest rates and reduces private-sector investment.","correct":false,"explanation":"Both relationships are reversed. In the standard crowding-out mechanism, government borrowing raises interest rates, while the resulting higher costs reduce private investment."}]},{"id":"c1ddab26-6c77-4429-b338-a9213f4251f1","cardType":"basic","points":2,"front":"How can a large government deficit affect private investment?","back":"

Heavy borrowing raises interest rates.
Higher borrowing costs reduce private investment.

","mcqOptions":[{"text":"

Heavy borrowing raises interest rates.
Higher borrowing costs reduce private investment.

","correct":true,"explanation":"A large deficit usually requires substantial government borrowing. This increases demand for loanable funds, raises interest rates, and makes private investment more costly."},{"text":"

Heavy borrowing lowers interest rates.
Higher borrowing costs reduce private investment.

","correct":false,"explanation":"The second effect is correct, but heavy government borrowing generally increases demand for loanable funds and therefore raises, rather than lowers, interest rates."},{"text":"

Heavy borrowing raises interest rates.
Higher borrowing costs increase private investment.

","correct":false,"explanation":"The interest-rate effect is correct, but higher borrowing costs reduce the profitability of investment projects, so private investment normally falls rather than rises."},{"text":"

Heavy borrowing lowers interest rates.
Higher borrowing costs increase private investment.

","correct":false,"explanation":"Both effects are reversed. Deficit borrowing tends to push interest rates up, and those higher rates discourage private-sector investment through the crowding-out effect."}]},{"id":"67ecbb1e-f8c8-4119-a05b-7f8ec02c746e","cardType":"basic","points":1,"front":"What causes the demand for money to slope downward against the interest rate in Keynesian theory?","back":"The speculative motive.","mcqOptions":[{"text":"The speculative motive.","correct":true,"explanation":"The speculative motive makes people’s demand for money depend on the interest rate: they may hold money rather than bonds when they expect interest rates to rise."},{"text":"The transactions motive.","correct":false,"explanation":"The transactions motive explains holding money for everyday purchases, but it is mainly related to income. The interest-sensitive, downward-sloping component is the speculative motive."},{"text":"The precautionary motive.","correct":false,"explanation":"The precautionary motive concerns holding money for unexpected expenses and is primarily linked to income and uncertainty. Keynesian interest sensitivity comes from the speculative motive."},{"text":"The investment motive.","correct":false,"explanation":"Investment is affected by interest rates, but it is not one of Keynes’s motives for holding money. The downward-sloping money-demand section reflects the speculative motive."}]},{"id":"a4c4558a-518c-43e9-ab79-4d8da9663a66","cardType":"basic","points":2,"front":"How is the money supply represented in Keynesian liquidity preference diagrams?","back":"As a vertical line, because it is largely set by the central bank.","mcqOptions":[{"text":"As a vertical line, because it is largely set by the central bank.","correct":true,"explanation":"In a standard liquidity-preference diagram, the nominal money supply is fixed by the central bank at a given level, so it is shown as vertical and independent of the interest rate."},{"text":"As a horizontal line, because it is largely set by the central bank.","correct":false,"explanation":"A horizontal line implies that the quantity of money changes freely at one fixed interest rate. A centrally controlled fixed money quantity is instead represented by a vertical line."},{"text":"As a downward-sloping line, because it is largely set by the central bank.","correct":false,"explanation":"The downward-sloping curve represents demand for money, not its fixed supply. Central-bank control means the money-supply curve is normally drawn vertically."},{"text":"As an upward-sloping line, because it is largely set by the central bank.","correct":false,"explanation":"An upward slope would suggest that the supplied quantity of money rises with the interest rate. In the basic Keynesian diagram, central-bank-controlled supply is vertical."}]},{"id":"83b54783-4f33-4b80-98a2-c708f1fe2fa3","cardType":"basic","points":2,"front":"What happens to the liquidity preference interest rate when the money supply increases?","back":"The equilibrium interest rate falls, making credit cheaper.","mcqOptions":[{"text":"The equilibrium interest rate falls, making credit cheaper.","correct":true,"explanation":"With money demand unchanged, an increase in the money supply creates an excess supply of liquidity. Interest rates fall until the money market reaches a new equilibrium."},{"text":"The equilibrium interest rate rises, making credit more expensive.","correct":false,"explanation":"This reverses the liquidity-preference prediction. A larger money supply makes liquidity more abundant, putting downward pressure on the equilibrium interest rate."},{"text":"The equilibrium interest rate falls, making credit more expensive.","correct":false,"explanation":"The rate direction is correct, but lower interest rates reduce the cost of borrowing. Calling credit more expensive confuses the relationship between interest rates and borrowing costs."},{"text":"The equilibrium interest rate remains unchanged, making credit equally expensive.","correct":false,"explanation":"In the basic liquidity-preference model, an increased money supply shifts equilibrium to a lower interest rate. An unchanged rate would require an offsetting change in money demand."}]},{"id":"d7843e57-0c59-4a1d-b88f-cd6410641835","cardType":"basic","points":1,"front":"What happens to the liquidity preference interest rate when the money supply decreases?","back":"The equilibrium interest rate rises.","mcqOptions":[{"text":"The equilibrium interest rate rises.","correct":true,"explanation":"A decrease in the money supply creates a shortage of liquidity at the previous rate. People compete for the smaller money stock, pushing the equilibrium interest rate upward."},{"text":"The equilibrium interest rate falls.","correct":false,"explanation":"This reverses the model’s prediction. Reducing the money supply makes liquidity scarcer, so the equilibrium interest rate rises rather than falls."},{"text":"The equilibrium interest rate remains unchanged.","correct":false,"explanation":"A lower money supply shifts the fixed-supply position leftward in the liquidity-preference diagram, changing equilibrium unless money demand changes by an exactly offsetting amount."},{"text":"The equilibrium interest rate rises, making credit cheaper.","correct":false,"explanation":"The rise in the interest rate is correct, but higher interest rates make borrowing more expensive, not cheaper. The option combines the right direction with the wrong consequence."}]},{"id":"575166ad-8ac6-433f-9199-2bfd388bb091","cardType":"basic","points":2,"front":"Why are market interest rates distinct from the central bank's policy rate?","back":"Banks add a margin for risk and profit to the policy rate.","mcqOptions":[{"text":"Banks add a margin for risk and profit to the policy rate.","correct":true,"explanation":"The policy rate is a benchmark, not usually the exact rate faced by every borrower. Banks add a spread to cover default risk, operating costs, and profit."},{"text":"Banks subtract a margin for risk and profit from the policy rate.","correct":false,"explanation":"Banks generally add, rather than subtract, a spread because lending must compensate them for default risk, operating costs, and the return they seek."},{"text":"Banks add a margin for inflation and taxation to the policy rate.","correct":false,"explanation":"Inflation and taxation can influence market rates, but the standard reason banks’ rates differ from the policy rate is a margin covering lending risk and profit."},{"text":"Banks replace the policy rate with a margin for risk and profit.","correct":false,"explanation":"The policy rate remains the benchmark from which lending rates are set. Banks add a margin to it; they do not discard the policy rate entirely."}]},{"id":"4bf43518-0839-49d3-ae02-6caca3b48e07","cardType":"basic","points":1,"front":"What is the central bank's policy rate?","back":"The rate the central bank pays or charges banks.","mcqOptions":[{"text":"The rate the central bank pays or charges banks.","correct":true,"explanation":"The policy rate is the interest rate set by the central bank for lending to commercial banks or, in relevant arrangements, remunerating their reserves."},{"text":"The rate commercial banks pay or charge households.","correct":false,"explanation":"Rates charged to households are commercial lending or deposit rates. The policy rate specifically concerns the central bank’s transactions with banks."},{"text":"The rate the central bank charges households.","correct":false,"explanation":"Central banks do not normally set the direct borrowing rate paid by households. Their policy rate applies to dealings with commercial banks and influences household rates indirectly."},{"text":"The rate commercial banks pay or charge other firms.","correct":false,"explanation":"Business lending rates are set by commercial banks and usually include a spread over the policy rate. The policy rate itself applies to central-bank dealings with banks."}]},{"id":"28fc58ea-e6fe-48b8-8e28-e3e06d798503","cardType":"basic","points":3,"front":"What determines market rates on loans and mortgages?","back":"They are influenced by the policy rate but set by the demand for and supply of funds, including banks' risk and profit margins.","mcqOptions":[{"text":"They are influenced by the policy rate but set by the demand for and supply of funds, including banks' risk and profit margins.","correct":true,"explanation":"The policy rate influences borrowing costs, but market rates also reflect demand for and supply of funds, alongside banks’ assessments of risk and the margins they need to earn."},{"text":"They are determined entirely by the policy rate, regardless of the demand for and supply of funds or banks' risk and profit margins.","correct":false,"explanation":"This reflects the misconception that the central bank directly fixes every loan rate. The correct answer includes the policy rate’s influence plus market conditions and banks’ risk and profit margins."},{"text":"They are set only by the demand for and supply of funds, with no influence from the policy rate or banks' risk and profit margins.","correct":false,"explanation":"Demand and supply matter, but dismissing the policy rate and bank margins is incorrect. Market loan rates are influenced by the policy rate and also include risk and profit considerations."},{"text":"They are influenced by banks' risk and profit margins but set by the policy rate alone, independently of the demand for and supply of funds.","correct":false,"explanation":"This reverses the roles of the factors involved. The policy rate is influential rather than the sole determinant; demand, supply, risk and profit margins also affect market rates."}]},{"id":"b18fb795-b19a-4360-8966-3cad5ba2fe4a","cardType":"basic","points":1,"front":"Which theory should be used when a question focuses on saving and investment?","back":"The loanable funds theory.","mcqOptions":[{"text":"The loanable funds theory.","correct":true,"explanation":"Loanable funds theory explains the real interest rate through the interaction of saving, which supplies funds, and investment, which demands funds."},{"text":"The Keynesian liquidity preference theory.","correct":false,"explanation":"This theory focuses on money demand and money supply rather than saving and investment. The appropriate framework for saving and investment is loanable funds theory."},{"text":"The quantity theory of money.","correct":false,"explanation":"The quantity theory links the money supply, velocity and prices, not primarily saving and investment. Questions centred on those flows use loanable funds theory."},{"text":"The multiplier-accelerator theory.","correct":false,"explanation":"The multiplier-accelerator model concerns interactions between spending, income and investment over time. It is not the theory used to determine interest rates from saving and investment."}]},{"id":"e0230a7b-e5e9-47d9-919a-9c590c782a5e","cardType":"basic","points":1,"front":"Which theory should be used when a question focuses on the supply and demand for money?","back":"The Keynesian liquidity preference theory.","mcqOptions":[{"text":"The Keynesian liquidity preference theory.","correct":true,"explanation":"Keynesian liquidity preference theory determines the interest rate through the interaction of the demand for money and the supply of money."},{"text":"The loanable funds theory.","correct":false,"explanation":"Loanable funds theory focuses on saving and investment rather than money balances. A question about money supply and demand calls for Keynesian liquidity preference theory."},{"text":"The quantity theory of money.","correct":false,"explanation":"The quantity theory examines how money supply relates to nominal income and prices. It does not provide the intended framework for money demand and supply determining interest rates."},{"text":"The theory of comparative advantage.","correct":false,"explanation":"Comparative advantage explains gains from international trade based on opportunity costs. It does not analyse money markets or determine interest rates from money supply and demand."}]},{"id":"5e84a580-e08a-4dc8-90b0-b4b351fe3ee9","cardType":"cloze","points":null,"front":"Loanable funds theory sets the real interest rate where the supply of saving meets the demand for [ ].","back":"Loanable funds theory sets the real interest rate where the supply of saving meets the demand for investment funds.","mcqOptions":[{"text":"investment funds","correct":true,"explanation":"Loanable funds theory treats saving as the supply of funds and investment spending as the demand for investment funds, with their interaction determining the real interest rate."},{"text":"consumer goods","correct":false,"explanation":"Consumer goods are products purchased for consumption, not funds demanded by firms for investment. The demand side in this model is investment funds."},{"text":"loanable savings","correct":false,"explanation":"Saving supplies loanable funds rather than demanding them, so this reverses the roles in the model. The demand is for investment funds."},{"text":"money balances","correct":false,"explanation":"Money balances belong to liquidity preference analysis, where money demand meets money supply. Loanable funds theory instead matches saving with demand for investment funds."}]},{"id":"3f678d3c-36de-4eb0-a902-be90e1b0b427","cardType":"cloze","points":null,"front":"In loanable funds theory, an increase in saving shifts the supply curve to the [ ].","back":"In loanable funds theory, an increase in saving shifts the supply curve to the right.","mcqOptions":[{"text":"right","correct":true,"explanation":"More saving makes a greater quantity of funds available at each real interest rate, shifting the loanable-funds supply curve to the right."},{"text":"left","correct":false,"explanation":"A leftward shift represents a reduction in saving and available loanable funds. An increase in saving expands supply, so the curve shifts to the right."},{"text":"upward","correct":false,"explanation":"An upward movement can describe a change in quantity supplied along a curve, but a higher level of saving shifts the entire supply curve to the right."},{"text":"downward","correct":false,"explanation":"A downward movement is not the standard description of an increase in saving. Greater saving shifts the whole loanable-funds supply curve rightward, rather than simply moving along it."}]},{"id":"dad7e8fd-9780-4bb5-82cf-679f42714b6b","cardType":"cloze","points":null,"front":"In Keynesian liquidity preference theory, the money supply is drawn as a [ ].","back":"In Keynesian liquidity preference theory, the money supply is drawn as a vertical line.","mcqOptions":[{"text":"vertical line","correct":true,"explanation":"In the standard Keynesian liquidity preference diagram, the money supply is fixed by the monetary authorities, so it is shown as a vertical line."},{"text":"horizontal line","correct":false,"explanation":"A horizontal money-supply line would imply that the quantity of money changes freely at one interest rate. The standard model treats money supply as fixed and vertical."},{"text":"upward-sloping curve","correct":false,"explanation":"An upward-sloping curve suggests the supplied quantity rises with the interest rate. In this model, the fixed money supply is represented by a vertical line."},{"text":"downward-sloping curve","correct":false,"explanation":"A downward-sloping curve is associated with money demand or liquidity preference, not the fixed money supply. The money supply is drawn vertically."}]},{"id":"a781aa6a-37c6-4173-b147-fbe5b1d56057","cardType":"cloze","points":null,"front":"A larger money supply lowers the equilibrium interest rate, making credit [ ].","back":"A larger money supply lowers the equilibrium interest rate, making credit cheaper.","mcqOptions":[{"text":"cheaper","correct":true,"explanation":"An increase in money supply creates excess liquidity at the existing interest rate, pushing the equilibrium rate down and reducing the cost of borrowing."},{"text":"more expensive","correct":false,"explanation":"This reverses the normal liquidity-preference effect. A larger money supply lowers the equilibrium interest rate, making borrowing and credit cheaper rather than more expensive."},{"text":"less available","correct":false,"explanation":"Increasing the money supply makes funds more available, not less available. The resulting lower interest rate makes credit cheaper."},{"text":"unaffected","correct":false,"explanation":"The interest rate is affected because a larger money supply shifts the money-supply curve and changes equilibrium. The lower rate makes credit cheaper."}]},{"id":"412f2393-a886-4185-9487-5d00a16931c0","cardType":"cloze","points":null,"front":"Changes in saving or borrowing move the loanable funds rate, while changes in the [ ] move the liquidity preference rate.","back":"Changes in saving or borrowing move the loanable funds rate, while changes in the money supply move the liquidity preference rate.","mcqOptions":[{"text":"money supply","correct":true,"explanation":"Liquidity preference theory determines its interest rate where money demand meets money supply, so changes in the money supply shift the relevant equilibrium rate."},{"text":"price level","correct":false,"explanation":"The price level can affect real money balances, but it is not the direct variable identified here as shifting the liquidity preference rate. The correct variable is money supply."},{"text":"exchange rate","correct":false,"explanation":"Exchange rates matter for international trade and financial flows, but they are not the direct counterpart to saving or borrowing in this comparison. The relevant factor is money supply."},{"text":"investment demand","correct":false,"explanation":"Investment demand is part of the loanable funds framework and affects its interest rate. Liquidity preference analysis instead focuses on changes in the money supply."}]}]}],"examCountdown":null,"heading":"9.4.8 interest rate determination: loanable funds theory and Keynesian theory","title":"9.4.8 interest rate determination: loanable funds theory and Keynesian theory Flashcards","topbar":{"backHref":"/international-a-level/economics/cie/flashcards"},"topicSidebar":"$L90"}]}],"topicId":"0a84def0-2f84-4963-90a5-a796220f3f75","walled":"$L91"}],"$L92","$L93"]