In the open-economy macroeconomic model,if the supply of loanable funds shifts right,then
A)the supply of dollars in the market for foreign-currency exchange shifts left.
B)the supply of dollars in the market for foreign-currency exchange shifts right.
C)the demand for dollars in the market for foreign-currency exchange shifts left.
D)the demand for dollars in the market for foreign-currency exchange shifts right.

Question

Quizplus · Accepted Answer

When the supply of loanable funds shifts right, it typically leads to a decrease in interest rates, which can increase investment and capital outflows. This results in an increased supply of dollars in the foreign exchange market as more dollars are exchanged for foreign currency to invest abroad.

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