With the Foreign Interest Rate in the IS Model,an Increase

Multiple Choice

With the foreign interest rate in the IS model,an increase in the domestic interest rate causes __________ because __________.

A) leftward movement along the IS curve;it leads to appreciation of the domestic real exchange rate and causes domestic investment to fall
B) leftward movement along the IS curve;domestic investment falls
C) the IS curve to shift left;it leads to appreciation of the domestic real exchange rate and causes domestic investment to fall
D) the IS curve to shift left;it leads to depreciation in the domestic real exchange rate and causes a decline in domestic investment
E) the IS curve to shift right;it leads to appreciation in the domestic real exchange rate