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:

Quintile

A statistical value that represents 20% of a given population or dataset, dividing it into five equal parts.

Percentage

A rate, number, or amount in each hundred.

Income Distribution

A measure of how a nation’s total GDP is distributed amongst its population.

Incentive

something that motivates or encourages an individual or entity to perform or act in a certain manner.