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Question 65

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Use the following to answer questions: Use the following to answer questions:   -In the absence of international capital flows,the equilibrium interest rate in the Canadian market for loanable funds is 3%,while in Germany,it is 7%.International borrowing and lending between Canada and Germany could result in a common interest rate of _____% and _____. A)  5;capital inflows to Canada matching the capital outflows from Germany B)  3;massive capital inflows from Germany to Canada C)  4;capital outflows from Canada matching the capital inflows to Germany D)  7;massive capital inflows from Canada to Germany
-In the absence of international capital flows,the equilibrium interest rate in the Canadian market for loanable funds is 3%,while in Germany,it is 7%.International borrowing and lending between Canada and Germany could result in a common interest rate of _____% and _____.


A) 5;capital inflows to Canada matching the capital outflows from Germany
B) 3;massive capital inflows from Germany to Canada
C) 4;capital outflows from Canada matching the capital inflows to Germany
D) 7;massive capital inflows from Canada to Germany

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