In the open-economy macroeconomic model, where does the demand for loanable funds come from?
A) domestic investment
B) net exports
C) net capital outflow
D) the sum of net capital outflow and domestic investment

Question

Quizplus · Accepted Answer

The demand for loanable funds in the open-economy macroeconomic model comes from domestic investment. This is because domestic firms need to borrow funds to finance their investment projects, which in turn drives the demand for loanable funds. While net exports and net capital outflow are also important components of the open-economy model, they do not directly drive the demand for loanable funds.

In the Open-Economy Macroeconomic Model, Where Does the Demand for Loanable