Assume that the money demand function is (M / P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000, and the price level P is 2. If the price level is fixed and the supply of money is raised to 2,800, then the equilibrium interest rate will:
A. drop by 4 percent
B. drop by 2 percent
C. drop by 1 percent
D. remain unchanged
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