What is the expected outcome when there is an increase in the demand for money, assuming all other factors remain constant?

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Interest rates decrease while the money supply remains unchangedInterest rates rise but the money supply stays the sameThe money supply expands and interest rates declineThe money supply grows with no change in interest rates

Explanation

When the demand for money rises, the central bank typically increases the money supply to meet this demand, which tends to lower interest rates. Therefore, an outward shift in money demand leads to a higher quantity of money accompanied by reduced interest rates.