Refer to Figure 19-3.At an interest rate of 3 percent,the diagram indicates that
A) there is a surplus in the market for foreign-currency exchange.
B) national saving equals domestic investment.
C) net capital outflow + domestic investment = national saving.
D) in the market for foreign-currency exchange the quantity of dollars supplied equals the quantity of dollars demanded.

Question

Quizplus · Accepted Answer

At an interest rate of 3 percent, the diagram indicates that net capital outflow plus domestic investment equals national saving, as this is a condition for equilibrium in the market for loanable funds.