Suppose the Central Bank Raises Interest Rates

Suppose the central bank raises interest rates. Which statement is a logical explanation of how this will impact aggregate demand?

A) Higher interest rates attract funding from abroad, which provides an injection into the country's economy, raising aggregate demand.
B) Higher interest rates create a greater incentive for investments, which increases aggregate demand.
C) Higher interest rates cause an increase in savings and government spending, which leads to a reduction in aggregate demand.
D) Higher interest rates cause reductions in investment in capital and houses, which reduce aggregate demand.