Which of the following statements about the Liquidity Preference Theory is correct?
- An increase in income leads to an increase in the demand for money.
- The interest rate is determined by the demand and supply of money.
- A higher interest rate decreases the demand for money as a store of value.
1
Only 1 is correct
2
Only 2 is correct
3
Both 1 and 3 are correct
4
All statements are correct
5
Question Not Attempted