In an Open Economy, Where Does the Demand for Loanable

question 1

Multiple Choice

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

• A)only from those who want to borrow funds to buy domestic capital goods
• B)only 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 stock in Canadian companies

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Definitions:

Income Elasticity

A measure of how much the demand for a product changes in response to a change in consumers' income.

Quantity Demanded

The overall volume of a commodity or service that individuals are prepared and financially able to buy at a certain price.

Education

The process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits through methods like teaching, training, storytelling, discussion, and directed research.

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in its price.