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So when there is too much demand for goods in the economy its price level will increase because the consumer is willing to pay more for the same amount of goods to cool the price levels in the economy then central bank will follow contractionery monetary policy which is increasing the interest rate so people will start saving more and investing less amount of money because money become expensive
With higher interest rate people will save more & business will invest less because there cost of capital is going up there positive NPV project will become negative
So option B is correct
The price level is high which means the interest level is high check the derivation of AD curve from IS so High-interest rats lead to low consumption and low demand.