Assume that the demand for money depends on the interest rate. A decrease in the money supply will cause
A. the interest rate to increase, the quantity demanded of money to decrease, and the velocity of money to decrease.
B. the interest rate to increase, the quantity demanded of money to decrease, and the velocity of money to increase.
C. the interest rate to decrease, the quantity demanded of money to increase, and the velocity of money to decrease.
D. the interest rate to decrease, the quantity demanded of money to decrease, and the velocity of money to increase.
Answer: B
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