If the world real interest rate falls, then a country that is an international lender
A)increases the amount of its lending.
B)does not change the amount of its lending.
C)decreases the amount of its lending.
D)changes from being a net foreign lender to a net foreign borrower.
E)none of the above

Question

Quizplus · Accepted Answer

When the world real interest rate falls, the return on lending decreases. This makes it less attractive for international lenders to offer financing to other countries. As a result, a country that is an international lender would likely decrease the amount of its lending.

If the World Real Interest Rate Falls, Then a Country