Solved

Two Nations Are Located Next to One Another

Question 25

Multiple Choice

Two nations are located next to one another.In Nation A,people are very thrifty and spend much less than their incomes; moreover,Nation A's government runs a balanced budget every year.In Nation B,people spend all of their incomes,but their government runs consistent deficits.Thus,


A) Nation A's extra savings would increase the supply of loanable funds to Nation B.
B) Nation B's government deficit would be a supply of loanable funds to Nation B.
C) Nation A's extra savings would increase the demand for loanable funds in Nation B.
D) Nation B would instantly default on all of its debt obligations.
E) Nation A's extra savings would decrease the supply of loanable funds to Nation B.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents