Use the Following to Answer Questions

question 25

Multiple Choice

Use the following to answer questions:
Figure: International Capital Flows
-(Figure: International Capital Flows) Look at the figure International Capital Flows. At an interest rate of 4%, the quantity of loanable funds supplied by U.S. lenders is _____ the quantity of loanable funds demanded by U.S. borrowers.

• A)greater than
• B)less than
• C)equal to
• D)not related to

---

Definitions:

Public Good

Goods that are non-excludable and non-rivalrous, meaning that consumption by one individual does not reduce availability to others, and people cannot be prevented from using them.

Consumption

The act of using goods and services by households.

External Costs

Costs of economic activity not borne by the producer or consumer but by society, often not reflected in the price of goods or services.

Economic Efficiency

A situation where resources are allocated in a way that maximizes the production of goods and services at the lowest cost.