In the open-economy macroeconomic model,the supply of loanable funds equals
A)national saving.The demand for loanable funds comes from domestic investment + net capital outflow.
B)national saving.The demand for loanable funds comes only from domestic investment.
C)private saving.The demand for loanable funds comes from domestic investment + net capital outflow.
D)private saving.The demand for loanable funds comes only from domestic investment.

Question

Quizplus · Accepted Answer

In an open-economy macroeconomic model, the supply of loanable funds comes from national saving, which includes both private saving and government saving. The demand for loanable funds comes from domestic investment and net capital outflow (the difference between capital inflow and capital outflow). Therefore, option A, which states that the demand for loanable funds comes from both domestic investment and net capital outflow, is the correct choice.

In the Open-Economy Macroeconomic Model,the Supply of Loanable Funds Equals