Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions .
Exhibit: The Money Supply and Aggregate Demand
-(Exhibit: The Money Supply and Aggregate Demand) An increase in U.S. interest rates would

A) decrease the demand for U.S. dollars, increase the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .
B) decrease the demand for U.S. dollars, decrease the exchange rate, and lead to an increase in net exports. The results of such a policy are represented in Panel (a) .
C) increase the demand for U.S. dollars, increase the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .
D) increase the demand for U.S. dollars, decrease the exchange rate, and lead to a decrease in net exports. The results of such a policy are represented in Panel (b) .