9. If the world real interest rate was lower than the interest rate that would occur if the Canadian economy were closed, then what would the Canadian net capital outflow be? (5 marks)

a. positive b. negative

c. decreasing d. increasing

10. Peter and Wendy are co-owners of the Canadian firm, Tick Tock Airlines. Peter borrows money to build airplanes in Quebec. Wendy borrows money to build airplanes in England. How does this affect the market for loanable funds in Canada? (5 marks)

a. Peter increases the demand for loanable funds.

b. Wendy increases the demand for loanable funds.

c. Peter increases the supply for loanable funds.

d. Wendy increases the supply of loanable funds.

FULL EXPLAINATION PLEASE