As the interest rate increases
a. consumption, investment, and net exports increase, and aggregate demand increases
b. consumption increases but investment and net exports decrease; aggregate demand remains unchanged
c. consumption, investment, and net exports decrease; aggregate demand decreases

C. Consumption, investment, and net exports decrease; aggregate demand decreases

Explanation:

Lets examine the results of an interest rate increase on each factor

Consumption deceases as the cost of borrowing has increased. Less people will actually borrow to fund their purchases. Furthermore, an increased interest rate gives people an incentive to save as they can make a better return just by keeping money in savings accounts. This dampens the consumption as people then spend less.

Investment decreases as the cost of borrowing is high, less people are willing to borrow money for investment which is expensive now, instead they may be able to make a rather safe return just by saving money and thus investment is not actively sought in periods with high interest rates.

As the local interest rates are high and people are able to gain more advantage by savings: foreign investors may be attracted. They may want to save money in the local banks to take advantage of a higher return. This increases the demand for local currency which then appreciates the currency thus making exports expensive. These expensive exports may now be reduced as compared to the when the currency had not appreciated.

Aggregate demand on the whole decreases as people are less consumption oriented (discussed above). There is a less of demand for investment goods that also contributes to the total aggregate demand curve shifting to the left.

Hope that helps.

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