Classify Each of the Following in Terms of Their Effect

Multiple Choice

Classify each of the following in terms of their effect on interest rates (increase or decrease) :
I. Covenants on borrowing become more restrictive
II. The Federal Reserve increases the money supply
III. Total household wealth increases

A) I increases; II increases; III increases
B) I increases; II decreases; III decreases
C) I decreases; II increases; III increases
D) I decreases; II decreases; III decreases
E) none of the above