Other things the same,an increase in the U.S.interest rate causes the quantity of loanable funds supplied to
A)rise because net capital outflow and domestic investment rise.
B)rise because national saving rises.
C)fall because net capital outflow and domestic investment rise.
D)fall because national saving falls.

Question

Quizplus · Accepted Answer

An increase in the U.S. interest rate makes saving more attractive, leading to an increase in national saving, which in turn increases the quantity of loanable funds supplied.

Other Things the Same,an Increase in the U