If market participants come to believe that the expected inflation rate embedded in the current nominal risk-free rate of interest is less than will actually occur, this will have the effect of:（）

A. increasing demand for funds and decreasing the supply until the nominal risk-free rate decreases to reflect the new expectations.

B. decreasing demand for funds and increasing the supply until the nominal risk-free rate increases to reflect the new expectations.

C. increasing demand for funds and decreasing the supply until the nominal risk-free rate increases to reflect the new expectations.