Which of the following properly describes the interest-rate effect? a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, and a higher interest rate increases the quantity of goods and services demanded. b. A higher price level leads to higher money demand, higher money demand leads to lower interest rates, and a lower interest rate reduces the quantity of goods and services demanded. c. A lower price level leads to lower money demand, lower money demand leads to lower interest rates, and a lower interest rate reduces the quantity of goods and services demanded. d. A lower price level leads to lower money demand, lower money demand leads to lower interest rates, and a lower interest rate increases the quantity of goods and services demanded.

Which of the following properly describes the interest-rate
effect?

a. A higher price level leads to higher money demand, higher
money demand leads to higher interest rates, and a higher interest
rate increases the quantity of goods and services demanded.

b. A higher price level leads to higher money demand, higher
money demand leads to lower interest rates, and a lower interest rate
reduces the quantity of goods and services demanded.

c. A lower price level leads to lower money demand, lower
money demand leads to lower interest rates, and a lower interest rate
reduces the quantity of goods and services demanded.

d. A lower price level leads to lower money demand, lower money
demand leads to lower interest rates, and a lower interest rate
increases the quantity of goods and services demanded.