Which of the Following Properly Describes the Interest Rate Effect

question 202

Multiple Choice

Which of the following properly describes the interest rate effect?

• A)As the money supply increases, the interest rate falls, so spending rises.
• B)As the money supply increases, the interest rate rises, so spending falls.
• C)As the price level increases, the interest rate falls, so spending rises.
• D)As the price level increases, the interest rate rises, so spending falls.

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