Holding All Other Things Constant, When the Price Level Falls

Multiple Choice

Holding all other things constant, when the price level falls, interest rates:

A) ​rise and firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding.
B) ​rise and firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding.
C) ​falls and firms want to borrow less for new plants and equipment and households want to borrow more for homebuilding.
D) ​falls and firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding.