A Small Country Is a Net Foreign Borrower If Its

question 160

Multiple Choice

A small country is a net foreign borrower if its real interest rate without foreign borrowing is
The world real interest rate.

• A) not comparable to
• B) higher than
• C) lower than
• D) equal to

---

Definitions:

Labor Unions

Organizations formed by workers from related fields that work towards protecting their collective interests in terms of wages, working hours, and working conditions.

Rent

A regular payment made by a tenant to an owner for the use of the owner’s building, land, or other property.

Nominal Interest Rates

The interest rates before taking inflation into account, often quoted by financial institutions.

Real Interest Rates

The interest rate adjusted for inflation, representing the true cost of borrowing and the true yield on an investment.