The diagram shows the market equilibrium exchange rate between the Chinese yuan and the U.S. dollar (USD) under a floating exchange rate regime. Suppose China's central bank decides to increase interest rates. Shift the demand and supply curves as appropriate. Macmillan Learning This increase in Chinese interest rates will lead to O a decrease in domestic Chinese aggregate demand, Supply which will be made worse by the change in exchange rates. O a decrease in domestic Chinese aggregate demand, but this will be somewhat offset by the change in exchange rates. Exchange rate (USD per yuan) O an increase in domestic Chinese aggregate demand, which will be further strengthened by the change in exchange rates. Demand O an increase in domestic Chinese aggregate demand, but this will be somewhat offset by the change in exchange rates. Quantity of yuan