If the world real interest rate falls, then a country that is a net foreign lender
A) decreases the amount of its lending.
B) None of the above answers is correct because lending might increase, decrease, or not change.
C) increases the amount of its lending.
D) does not change the amount of its lending.

Question

Quizplus · Accepted Answer

A fall in the world real interest rate reduces the return on lending, leading a net foreign lender to decrease the amount of its lending.

If the World Real Interest Rate Falls, Then a Country