The Interest-Rate Effect Suggests That

Multiple Choice

The interest-rate effect suggests that

A) a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending.
B) an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending.
C) an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
D) an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.