In a Large Open Economy

question 47

Multiple Choice

In a large open economy,

• A)domestic lending and borrowing decisions have no impact on the world real interest rate.
• B)an increase in the domestic supply of loanable funds would lower the world real interest rate.
• C)the domestic equilibrium real interest rate is determined independently of foreign borrowing and lending.
• D)an increase in the domestic demand for loanable funds would lower the world real interest rate.

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