-Which of the Following Statements Best Describes Figure 3-2

-Which of the following statements best describes Figure 3-2?

A) As the Fed increases reserves and with them the money supply, the interest rate tends to increase.
B) As the Fed decreases available reserves and decreases the money supply, the interest rate tends to increase.
C) As consumer incomes fall, consumers become more frugal. As a result they increase their demand for money and the interest rate increases.
D) An increase in household incomes is likely to increase the demand for money. As money demand increases, the interest rate rises.