Suppose We Have an Initial Equilibrium with Curves IS₀ and LM₀.The

Multiple Choice

Suppose we have an initial equilibrium with curves IS₀ and LM₀.The price level then falls.At every point on LM₀ there is now an excess ________ real balances,which is eliminated at each income level by a ________ in the interest rate,meaning that the new LM curve is ________ LM₀.

A) demand for,fall,above
B) demand for,fall,below
C) demand for,rise,above
D) supply of,rise,above
E) supply of,fall,below