If a Foreign Trading Partner of Canada Increases Its Budget

Multiple Choice

If a foreign trading partner of Canada increases its budget deficit,raising interest rates in that country,what will the effect on Canadian exports and AD be?

A) Canadian exports will increase but AD will be unchanged.
B) Canadian exports and AD will both tend to rise.
C) Canadian exports and AD will both tend to fall.
D) There will be an indeterminate effect on Canadian exports and AD.