Suppose That an Increase in the Price Level Reduces the Value

Multiple Choice

Suppose that an increase in the price level reduces the value of real wealth,which then causes a reduction in consumption but no change in saving.In this case:

A) there is both an interest rate effect and a wealth effect.
B) there is no wealth effect.
C) there is an interest rate effect but no wealth effect.
D) there is a wealth effect but no interest rate effect.
E) there is no wealth effect and no interest rate effect.