A very small country is an international lender and its supply of loanable funds increases.As a result, the equilibrium quantity of loanable funds used in the country _______ and the country's foreign lending _______.

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When a very small country that is an international lender experiences an increase in its supply of loanable funds, the equilibrium quantity of loanable funds used within the country does not change because the country's interest rate is determined by the world interest rate, which remains unaffected by changes in the country's loanable funds supply. However, the country's foreign lending increases because the excess supply of loanable funds is lent out internationally.

A Very Small Country Is an International Lender and Its