In the open-economy macroeconomic model,if a country's supply of loanable funds shifts right,then
A) net capital outflow rises,so the demand for dollars shifts right.
B) net capital outflow falls,so the demand for dollars shifts left.
C) net capital outflow rises,so the supply of dollars shifts right.
D) net capital outflow falls,so the supply of dollars shifts left.

Question

Quizplus · Accepted Answer

When the supply of loanable funds shifts right, it typically lowers the interest rate, leading to an increase in net capital outflow. This increase in net capital outflow means more domestic currency is supplied to the foreign exchange market, shifting the supply of dollars to the right.

In the Open-Economy Macroeconomic Model,if a Country's Supply of Loanable