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:

Consumption Expenditures

The total amount spent by consumers on goods and services for personal use, often considered a major component of gross domestic product (GDP).

Short Run

A period in economics where the quantities of some inputs or resources cannot be changed.

Unemployment

A situation where individuals who are capable of working and willing to work at prevailing wage rates cannot find employment.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, subsequently eroding purchasing power.