-Refer to Figure 12

Multiple Choice

-Refer to Figure 12.1. In terms of the diagram an increase in US interest rates would:

A) shift D₀ out and S₀ in, causing a rise in the exchange rate.
B) shift D₀ out and S₀ out, causing a fall in the exchange rate.
C) shift D₀ in and S₀ in, leaving the exchange rate unchanged.
D) shift D₀ in and S₀ out, having no effect on the exchange rate.