In the Open-Economy Macroeconomic Model, Where Does the Demand for Loanable

question 38

Multiple Choice

In the open-economy macroeconomic model, where does the demand for loanable funds come from?

• A) domestic investment
• B) net exports
• C) net capital outflow
• D) the sum of net capital outflow and domestic investment

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Definitions:

Public Subsidies

Financial support provided by the government to individuals, organizations, or industries to promote desired activities or reduce burden.

Special-Interest Effect

The impact of a small, focused group influencing policy for its own benefit, often at the broader public's expense.

Pork-Barrel Politics

The allocation of government spending for localized projects secured primarily to bring money to a representative's district, with the implication of gaining the representative favor or votes.