Which of the Following Best Describes the "Interest Rate Effect

Multiple Choice

Which of the following best describes the "interest rate effect"?

A) An increase in the price level raises the interest rate and chokes off government spending.
B) An increase in the price level lowers the interest rate and chokes off government spending.
C) An increase in the price level raises the interest rate and chokes off investment and consumption spending.
D) An increase in the price level lowers the interest rate and chokes off investment and consumption spending.
E) An increase in the price level raises the unemployment rate and chokes of interest in participating the in labour market.