The dynamic effects of an increase in money supply Which of the following diagrams is consistent with the long-run effect of an increase in the growth rate of the money supply on the nominal interest rate? Assume that people anticipate the change in the growth rate of the money supply. Panel A Panel B The price-level effect implies that: Increases in the price level lead to a lower nominal interest rate Increases in income lead to a higher nominal interest rate Increases in the price level lead to a higher nominal interest rate