According to the Interest Rate Effect,a Fall in the Price

Multiple Choice

According to the interest rate effect,a fall in the price level will

A) decrease the real value of money balances which causes the quantity demanded of aggregate output to increase.
B) increase lending which causes interest rates to fall,increasing investment spending and increasing the quantity demanded of aggregate output.
C) lead to a decrease in net exports,which causes the quantity demanded of aggregate output to decrease.
D) increase the real value of money balances which causes interest rates to increase,reducing the quantity demanded of aggregate output.