A Small Country Is a Net Foreign Borrower and Its

question 42

Multiple Choice

A small country is a net foreign borrower and its supply of loanable funds increases. As a result, the equilibrium quantity of loanable funds used in the country and the countryʹs foreign borrowing .

• A) increases; does not change
• B) does not change; increases
• C) does not change; does not change
• D) does not change; decreases

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Definitions:

Negative Terms

Phrases or words that convey unfavorable, pessimistic, or detrimental meanings, often used to describe adverse situations.

Bounded Rationality Model

A concept that suggests individuals make decisions based on the limited information available to them and their own cognitive limitations.

Tacit

Knowledge that is understood or implied without being explicitly stated, often difficult to transfer verbally.

Explicit

refers to something stated clearly and in detail, leaving no room for confusion or doubt.