According to the Theory of Liquidity Preference, If the Demand

Multiple Choice

According to the theory of liquidity preference, if the demand for real money balances exceeds the supply of real money balances, individuals will:

A) sell interest-earning assets in order to obtain non-interest-bearing money.
B) purchase interest-earning assets in order to reduce holdings of non-interest-bearing money.
C) purchase fewer goods and services.
D) be content with their portfolios.