If the World Real Interest Rate Is Less Than the Real

question 134

Multiple Choice

If the world real interest rate is less than the real interest rate that would occur in Canada if there was no trade, what should we expect to happen in the supply and demand for loanable funds graph?

• A) the supply curve to shift to the left
• B) the demand curve to shift to the right
• C) net capital outflow to remain unchanged
• D) net capital outflow to decrease

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Definitions:

Breach of Contract

Occurs when one party in a binding agreement fails to deliver according to the terms of the agreement.

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Specific Performance

A legal remedy requiring a party to perform a specific act, usually fulfilling a contractual agreement, rather than paying damages for failing to perform.

Risk of Loss

The liability for damage or destruction of goods, determining which party bears the financial burden if goods are damaged before delivery.