According to the theory of liquidity preference, decreasing the money supply will _____ nominal interest rates in the short run, and, according to the Fisher effect, decreasing the money supply will _____ nominal interest rates in the long run.
A)increase; increase
B)increase; decrease
C)decrease; decrease
D)decrease; increase

Question

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The Answer of According to the theory of liquidity preference, decreasing the money supply will _____ nominal interest rates in the short run, and, according to the Fisher effect, decreasing the money supply will _____ nominal interest rates in the long run.
A)increase; increase
B)increase; decrease
C)decrease; decrease
D)decrease; increase

According to the Theory of Liquidity Preference, Decreasing the Money