Which of the Following Effects Is Seen on the Money

Which of the following effects is seen on the money supply and the economy when the Federal Reserve Board raises the discount rate?

A) Interest rates decrease; the money supply increases; economic activity increases.
B) Interest rates increase; the money supply decreases; economic activity slows down.
C) Banks make more loans; the money supply increases; economic activity increases.
D) People are encouraged to make major purchases,increasing economic activity.
E) The money supply increases; economic activity increases.