In the Liquidity-Preference Model, a Decrease in the Money Supply

Multiple Choice

In the liquidity-preference model, a decrease in the money supply causes

A) the nominal interest rate to increase and the equilibrium quantity of money to decrease.
B) the nominal interest rate to increase and the equilibrium quantity of money to remain unchanged.
C) the nominal interest rate to decrease and the equilibrium quantity of money to remain unchanged.
D) both the nominal interest rate and the equilibrium quantity of money to decrease.