Question : Which of these statements is true?

Option 1: At lower rates of interest, people will have a lower preference for liquidity.

Option 2: At higher rates of interest transactions, demand for money will be higher.

Option 3: At lower rates of interest, speculative demand for money will be higher.

Option 4: At higher rates of interest, the liquidity preference of people will increase.

Question : When the general interest rate reaches a low level, which of the following statements will be correct?

Option 1: Most people will expect the interest rate to rise in the future.

Option 2: Most people will prefer to hold bonds.

Option 3: Most people will speculate a further decline in the rate of interest.

Option 4: Any increase in the money supply will cause the interest rate to fall further.

Question : Which of the following statements is/are correct concerning the demand for money?
i. When the interest rate is high, the demand for money is low.
ii. When the interest rate is low, demand for money is also low.
iii. When the interest rate is high, demand for money is also high.
iv. When the interest rate is low, demand for money is high.

Option 1: Only ii and iv

Option 2: Only i and iv

Option 3: Only ii and iii

Option 4: Only i and ii

Question : Equilibrium price is the price when :

Option 1: Supply is greater than demand .

Option 2: Supply is less than demand .

Option 3: Demand  is very high .

Option 4: Supply is equal to demand.

Question : At a certain sum of money with the interest rate of 6% per annum for 4 years, the simple interest is Rs. 4500. Find the compound interest (compounding annually) of 2 years at the same sum when the rate of interest is 4% per annum.

Option 1: Rs. 1,530

Option 2: Rs. 1,430

Option 3: Rs. 1,830

Option 4: Rs. 1,560