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In May,2011,the Interest Rate in North Korea Was 5

Question 188

Multiple Choice

In May,2011,the interest rate in North Korea was 5.4 percent. For the same month,the interest rate in the United States was slightly more than 1 percent.Suppose the risks in North Korea were the same as in the United States.If North Korea were integrated into the global economy,then


A) funds would flow into North Korea and the equilibrium quantity of loanable funds in North Korea would increase.
B) funds would flow out of North Korea and the equilibrium quantity of loanable funds in North Korea would decrease.
C) funds would flow into North Korea and world interest rates would rise.
D) funds would flow into North Korea and world interest rates would fall.

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