Which of the Following Best Describes the Interest Rate Effect

question 2

Multiple Choice

Which of the following best describes the interest rate effect? As the price level rises:

• A)more money is demanded,interest rates rise,and investment spending falls
• B)less money is demanded,so consumption spending must fall to maintain equality of investment and saving
• C)the value of assets rises,increasing bank profits and total lending
• D)the Fed raises interest rates and investment spending rises

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