Figure 5.4 Suppose the World Consists of Two Large Open Economies, Canada

question 14

Multiple Choice

Figure 5.4

Suppose the world consists of two large open economies, Canada and the rest of the world. The figures above represent loanable funds graphs for these two economies.
-Refer to Figure 5.4.The international capital market will be in equilibrium when the real interest rate in Canada is ________ and the real interest rate in the rest of the world is ________.

• A) 7%; 3%
• B) 5%; 7%
• C) 9%; 3%
• D) 5%; 5%

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Definitions:

Thurgood Marshall

The first African American Supreme Court Justice, serving from 1967 to 1991, known for his advocacy for civil rights and equal justice under the law.

Charles Hamilton Houston

A prominent African American lawyer, Dean of Howard University Law School, and key figure in dismantling Jim Crow laws through legal challenges.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies from the late 1940s to the late 1980s, characterized by threats, propaganda, and other measures short of open warfare.

Foreign Power

A country or entity outside of one's own nation that has influence or control over certain aspects of another nation's affairs.