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

Question

Quizplus · Accepted Answer

When the supply of loanable funds shifts right, it indicates an increase in the availability of funds, leading to a decrease in the interest rate. Lower interest rates make domestic assets less attractive, increasing the supply of dollars in the foreign exchange market as investors seek higher returns abroad.

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