In the Absence of International Capital Flows, the Equilibrium Interest

In the absence of international capital flows, the equilibrium interest rate in the U.S. market for loanable funds is 3%, while in Germany it is 7%. International borrowing and lending between the United States and Germany could result in a common interest rate of _____% and _____.

A) 5; capital inflows to the United States matching the capital outflows from Germany
B) 3; massive capital inflows from Germany to the United States
C) 4; capital outflows from the United States matching the capital inflows to Germany
D) 7; massive capital inflows from the United States to Germany