If the next chair of the federal reserve board has a reputation for advocating an even slower rate of money growth than the current chair, what will happen to interest rates?
a. slower money growth will lead to a liquidity effect, which will raise interest rates. moreover, the lower income, price level, and inflation will reinforce the increase in interest rates.
b. slower money growth will lead to a liquidity effect, which will raise interest rates; however, the lower income, price level, and inflation will tend to lower interest rates.
c. slower money growth will lead to a liquidity effect, which will lower interest rates. moreover, the lower income, price level, and inflation will reinforce the decrease in interest rates.
d. slower money growth will lead to a liquidity effect, which will lower interest rates; however, the lower income, price level, and inflation will tend to raise interest rates.