In an open economy, desired domestic lending
A)must equal desired domestic borrowing.
B)must equal desired domestic borrowing plus the amount of international lending.
C)is always greater than desired domestic borrowing.
D)is always less than desired domestic borrowing.

Question

Quizplus · Accepted Answer

In an open economy, desired domestic lending can be equal to desired domestic borrowing plus the amount of international lending, as the economy can lend or borrow internationally.

In an Open Economy, Desired Domestic Lending