If the supply of loanable funds curve shifts right,then the equilibrium
A)interest rate and level of net capital outflows rise.
B)interest rate rises and the equilibrium level of net capital outflow falls.
C)interest rate falls and the equilibrium level of net capital outflow rises.
D)interest rate and level of net capital outflows fall.

Question

Quizplus · Accepted Answer

When the supply of loanable funds increases, it shifts the curve to the right, leading to a lower equilibrium interest rate. Lower interest rates make domestic assets less attractive, increasing net capital outflows.

If the Supply of Loanable Funds Curve Shifts Right,then the Equilibrium