The Demand for Money Balances Is Negatively Related to the Interest

The demand for money balances is negatively related to the interest rate because a decline in the interest rate:

A) encourages businesses to increase their level of investment spending.
B) means that the opportunity cost of holding an extra dollar as money balances as opposed to other assets decreases.
C) means that households spend more on all types of goods as the interest rate falls.
D) encourages households to hold other assets instead of money balances.