Figure 14-4

-Refer to Figure 14-4. Suppose that U.S. firms desire to purchase more capital in the U.S. The effects of this could be illustrated by

Question

Figure 14-4
 
-Refer to Figure 14-4. Suppose that U.S. firms desire to purchase more capital in the U.S. The effects of this could be illustrated by

Quizplus · Accepted Answer

When U.S. firms desire to purchase more capital, the demand for loanable funds increases, shifting the demand curve to the right in panel a. This increased demand for capital in the U.S. can lead to a decrease in the supply of capital available for foreign investment, shifting the supply curve to the left in panel c.

Figure 14-4 -Refer to Figure 14-4. Suppose That U.S. Firms Desire to U.S