When the price level falls,the interest rate
A) rises.When the money supply falls,the interest rate rises.
B) rises.When the money supply falls,the interest rate falls.
C) falls.When the money supply falls,the interest rate rises.
D) falls.When the money supply falls,the interest rate falls.

Question

Quizplus · Accepted Answer

When the price level falls, the demand for money decreases, leading to a lower interest rate. When the money supply falls, the interest rate rises due to decreased availability of money.

When the Price Level Falls,the Interest Rate