Other things the same,if the U.S.interest rate falls,then U.S.residents will want to purchase
A)more foreign assets,which increases the quantity of loanable funds demanded.
B)fewer foreign assets,which decreases the quantity of loanable funds demanded.
C)more foreign assets,which increase the quantity of loanable funds supplied.
D)fewer foreign assets,which decreases the quantity of loanable funds supplied.

Question

Quizplus · Accepted Answer

When the interest rate in a country falls, it becomes relatively less attractive for its residents to save money in domestic financial instruments, such as bank deposits or bonds, as they will earn less return compared to what they could earn in another country with a higher interest rate. As a result, they are likely to shift some of their savings towards foreign assets, such as stocks, bonds, or real estate, which offer higher rates of return. This increased demand for foreign assets, in turn, increases the quantity of loanable funds demanded, as the purchase of these assets often involves borrowing in the currency of the asset's country, and thus, require loanable funds.

Other Things the Same,if the U