Which of the Following Principles Does the Theory of Liquidity

Multiple Choice

Which of the following principles does the theory of liquidity preference illustrate?

A) Monetary policy can be described either in terms of the money supply or in terms of the interest rate.
B) Monetary policy can be described either in terms of the exchange rate or the interest rate.
C) Monetary policy must be described in terms of the money supply.
D) Monetary policy must be described in terms of the interest rate.