In an Open Economy, Where Does the Demand for Loanable

question 103

Multiple Choice

In an open economy, where does the demand for loanable funds come from?

• A) from those who want to borrow funds to buy domestic capital goods
• B) from those who want to borrow funds to buy foreign assets
• C) from those who want to borrow funds to buy either domestic capital goods or foreign assets
• D) from those who want to borrow funds to buy Canadian bonds or shares of stock in Canadian companies

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Definitions:

Prohibition

The legal act of prohibiting the manufacture, transportation, and sale of alcohol, most notably implemented in the United States from 1920 to 1933.

Republicans

A political party in the United States that traditionally champions conservative ideologies, including limited government, lower taxes, and a free-market economy.

Northern Democrats

A faction of the Democratic Party in the United States before the Civil War, mainly based in the North, known for their diverse views on slavery.

Placidity

A state of calmness and tranquility, often describing a peaceful and undisturbed environment or demeanor.