1. Keynes and his effect on Europe
... invest not because of the interest rate they receive, but because of the prospective capital gain of the investment, example, people buy shares, not so much for the annual dividend but for the prospective increase in the marked value of the share. He developed a theory known as the liquidity preference theory, this determined interest rates. The Liquidity preference theory can be explained as follows. It concentrates on the demand and supply of ... money rather than the demand and supply of ... ...
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- Approx Pages: 13
- Grade Level: High School