In the Open-Economy Macroeconomic Model, If the U

Multiple Choice

In the open-economy macroeconomic model, if the U.S. interest rate rises, then its

A) net capital outflow rises, so the supply of dollars in the market for foreign exchange shifts right.
B) net capital outflow rises, so the demand for dollars in the market for foreign exchange shifts right.
C) net capital outflow falls, so the supply of dollars in the market for foreign exchange shifts left.
D) net capital outflow falls, so the demand for dollars in the market for foreign exchange shifts left.