A) a fall in the level of prices
B) an increase in the rate of interest
C) a decrease in the rate of interest
D) an increase in the level of income and employment
Correct Answer: B
Solution :
Exp. [b] This is a simple supply and demand question. Since, the supply of money is constant and its demand is increasing, there will be an increase in interest rates. It does not have much to do with the level of prices and the increase in the level of income and employment.
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