The Fed Lowers the Federal Funds Rate

The Fed lowers the federal funds rate. A mechanism through which aggregate demand increases is that the lower federal funds rate

A) decreases other short- term interest rate, which decreases investment, thereby increasing aggregate demand.
B) raises the exchange rate so that net exports decrease, which increases investment, thereby increasing aggregate demand.
C) decreases other short- term interest rates, which increases investment, thereby increasing aggregate demand.
D) increases other short- term interest rates, which decreases investment, thereby decreasing aggregate demand.