Which Statement Best Describes the Interest-Rate Effect

Multiple Choice

Which statement best describes the interest-rate effect?

A) As the money supply increases, money demand decreases, the interest rate falls, so spending rises.
B) As the money supply increases, money demand decreases, the interest rate rises, so spending falls.
C) As the price level increases, money demand increases, the interest rate falls, so spending rises.
D) As the price level increases, money demand increases, the interest rate rises, so spending falls.