According to Keynes' liquidity preference theory, what primarily determines the interest rate?

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Explanation

Keynes' liquidity preference theory states that the interest rate is set by the equilibrium between the supply of money and the demand for money. This contrasts with other theories that focus on loanable funds or labor markets.

According to Keynes' liquidity preference theory, wh… — Macroeconomic Policy Tools | PakQuizHub