Final answer:
An increase in reserve requirements will lead to a decrease in a nation's money supply. Additionally, a rise in the supply of funds in the financial market will lead to a decline in interest rates.
Step-by-step explanation:
Decrease in a Nation's Money Supply and Interest Rates
To answer the question about what will lead to a decrease in a nation's money supply, option D) An increase in reserve requirements is correct. When the central bank increases reserve requirements, banks must hold a larger fraction of their deposits as reserves. This means that they will have less money to lend out, effectively decreasing the amount of money circulating in the economy, hence reducing the money supply.
Concerning the query about what leads to a decline in interest rates in the financial market, the correct answer is C) a rise in supply of funds. When there is an increase in the supply of funds available for lending without an accompanying increase in demand, this surplus of funds typically causes lenders to reduce interest rates to attract borrowers.