Exhibit: Market for Real Money Balances 
Based on the graph, if the interest rate is r1, then people will _____ bonds, and the interest rate will _____.
A) sell; rise
B) sell; fall
C) buy; rise
D) buy; fall
Correct Answer:
Verified
Q44: The theory of liquidity preference states that
Q46: Exhibit: Market for Real Money Balances
Q48: According to the theory of liquidity preference,
Q50: Changes in fiscal policy shift the:
A) LM
Q53: According to the theory of liquidity preference,
Q58: Along an IS curve all of the
Q63: In the liquidity preference model, what adjusts
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Q96: Changes in monetary policy shift the:
A) LM
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