A) Showing preference to hold bonds and securities
B) Refraining from consumption
C) Desire of the public to hold cash
D) Showing preference to hold capital assets
Correct Answer: C
Solution :
In macroeconomic theory. liquidity preference refers to the demand for money (cash), considered as liquidity. The concept was first developed by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936). Liquidity preference delineates the Idea that Investors demand a premium for securities with longer maturities, which entail 17 greater risk. because they would prefer to hold cash. which entails less risk.
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