The interest-rate effect suggests that

• an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending
• an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending
• a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending
• an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending