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Economics (AS & A Level) · May / June 2025 · Paper 34 · Question 18

9708Money and banking

In Keynesian economic theory, what is the purpose of interest?

  1. Ato bring national income and expenditure into line
  2. Bto control the level of economic growth
  3. Cto create a balance between savings and investment
  4. Dto provide a reward for surrendering liquidity

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Correct answer: D. to provide a reward for surrendering liquidity

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