Question
Given a global market for lending and borrowing , for an international borrower nation, how will the equilibrium real interest rate and quantity of loanable
Given a global market for lending and borrowing, for an international borrower nation, how will the equilibrium real interest rate and quantity of loanable funds traded at equilibrium compare to the equilibrium real interest rate and quantity of loanable funds traded with only domestic borrowing and lending (in other words, no lending or borrowing between nations)?
A. Both the real interest rate and the quantity of loanable funds traded will be higher with international borrowing and lending than with only domestic borrowing and lending.
B . The real interest rate will be higher and the quantity of loanable funds traded will be lower with international borrowing and lending than only domestic borrowing and lending.
C. The real interest rate will be lower and the quantity of loanable funds traded will be higher with international borrowing and lending than only domestic borrowing and lending.
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