A Rise in World Real Interest Rates Relative to U

Multiple Choice

A rise in world real interest rates relative to U.S. interest rates

A) will have no effect on the demand for dollar-denominated assets because investors always prefer dollar-denominated assets.
B) will have no effect on the demand for dollar-denominated assets but will cause a decrease in the demand for assets denominated in other currencies.
C) will have no effect on the demand for dollar-denominated assets but will cause an increase in the demand for assets denominated in other currencies.
D) will cause international investors to increase their demand for dollar-denominated assets.
E) will cause international investors to decrease their demand for dollar-denominated assets.