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Can someone please help me with the following? 35.) Suppose that the equilibrium interest rate in the U.S. market for loanable funds is 3% prior

Can someone please help me with the following?

35.) Suppose that the equilibrium interest rate in the U.S. market for loanable funds is 3% prior to any international capital flows in the United States. The equilibrium interest rate in the Japanese market for loanable funds is 7%. If lenders in both nations believe that loans to foreigners are just as good as loans to their own citizens, capital will flow from _____, making interest rates _____ in Japan and _____ in the United States.

  1. Japan to the United States; fall; rise
  2. the United States to Japan; rise; fall
  3. the United States to Japan; fall; rise
  4. Japan to the United States; rise; fall

36.) Suppose that the interest rate in the United States is 4%, in Japan it is 7%, and financial assets in the two countries are equal in risk. Assuming that loans in Japan and the United States carry equal risk, this implies that:

  1. the central bank of Japan has adopted a more expansionary monetary policy.
  2. the interest rate in Japan will increase further as compared to the U.S. interest rate.
  3. Japanese lenders will lend to U.S. borrowers.
  4. U.S. lenders will lend to borrowers in Japan.

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