Figure 13-1
-Refer to the Figure 13-1.In the figure shown,if the world real interest rate went from 6 to 7 percent,what changes would occur?
A) There would be an increase in net capital outflow.
B) The demand for loanable funds curve to shift right.
C) The supply for loanable funds curve to shift left.
D) There would be a decrease in net capital outflow.

Question

Figure 13-1 
-Refer to the Figure 13-1.In the figure shown,if the world real interest rate went from 6 to 7 percent,what changes would occur?
A) There would be an increase in net capital outflow. 
B) The demand for loanable funds curve to shift right. 
C) The supply for loanable funds curve to shift left. 
D) There would be a decrease in net capital outflow.

Quizplus · Accepted Answer

An increase in the world real interest rate would make it more attractive for domestic residents to lend abroad, leading to an increase in net capital outflow.

Figure 13-1 -Refer to the Figure 13-1.In the Figure Shown,if the World