Figure 13-1
-Refer to Figure 13-1. If the world interest rate equals 7 percent, what is the net capital outflow?
A) -$4000
B) -$2000
C) $2000
D) $4000

Question

Figure 13-1 
-Refer to Figure 13-1. If the world interest rate equals 7 percent, what is the net capital outflow?
A) -$4000 
B) -$2000 
C) $2000 
D) $4000

Quizplus · Accepted Answer

At the world interest rate of 7 percent, the net capital outflow is equal to the difference between the domestic supply of loanable funds ($10,000) and the domestic demand for loanable funds ($14,000), which is -$4,000. Therefore, the answer is D.

Figure 13-1 -Refer to Figure 13-1. If the World Interest Rate Equals