According to the Theory of Liquidity Preference, If the Demand

question 95

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.

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Definitions:

Evidenced in Writing

Requirement for certain agreements to be recorded in written form in order to be legally enforceable.

Adverse Possession

The legal acquisition of title to another's real property by continuous possession under certain conditions for a specified period of time.

Vacant Plot

An empty piece of land that has not been developed or built upon.

Fencing

The sport of fighting with swords, particularly foils, épées, or sabres, according to set rules; also refers to a barrier or structure serving as a boundary or means of protection.