Other things the same,an increase in the U.S.real interest rate
A) raises net capital outflow which decreases the quantity of loanable funds demanded.
B) raises net capital outflow which increases the quantity of loanable funds demanded.
C) lowers net capital outflow which decreases the quantity of loanable funds demanded.
D) lowers net capital outflow which increases the quantity of loanable funds demanded.

Question

Quizplus · Accepted Answer

An increase in the U.S. real interest rate makes U.S. assets more attractive to foreign investors, reducing net capital outflow. This decrease in net capital outflow leads to a decrease in the quantity of loanable funds demanded.

Other Things the Same,an Increase in the U