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

Question

Quizplus · Accepted Answer

When the world real interest rate falls, the return on lending money internationally decreases, making it less attractive for a country that is an international lender to lend money. Therefore, the country is likely to decrease the amount of its lending.

If the World Real Interest Rate Falls, Then a Country