For a small open economy,an increase in the world real interest rate would necessarily
A)increase net foreign lending.
B)decrease net exports.
C)decrease the current account balance.
D)worsen the balance of payments.

Question

Quizplus · Accepted Answer

An increase in the world real interest rate makes foreign investment more attractive, leading to an increase in net foreign lending as domestic savers invest more abroad.

For a Small Open Economy,an Increase in the World Real