In an open economy, the domestic real interest rate is determined by:
A)domestic saving, domestic investment, and net capital inflows.
B)domestic investment.
C)domestic saving and domestic investment.
D)domestic saving and net capital inflows.

Question

Quizplus · Accepted Answer

The real interest rate is determined by the interaction of savers and investors. In an open economy, the real interest rate is determined by domestic saving, domestic investment and net capital inflows from abroad.

In an Open Economy, the Domestic Real Interest Rate Is