If the government of Monaco runs a large government budget deficit, the world real interest rate would : O a. Likely not change, since a deficit by such a small country will not change the supply of loanable funds in the international capital market 0 b. Likely not change, since a deficit by such a small country will not change the demand for loanable funds in the international capital market 0 c. Not change since the world interest rate is set exclusively by the behaviour of private sector entities 0 d. Be affected, but only to the extent that that the World Bank will allow, given its commitment to a stable world price level Which of the following is not among the relatively minor transactions that are recorded in the capital account? O a. Transfers made by migrants O b. Sales and purchases of rights to natural resources O c. Transactions involving assets such as copyrights, patents, and trademarks O d. Transactions involving physical capitalIn the loanable funds model, an explanation as to why the demand curve is downward sloping is that: O a. The lower the real interest rate, the more investment projects firms can profitably undertake, and the greater the quantity of loanable funds they will demand. 0 b. substitution and income effects work upon the quantity demanded,just as they do in the case of an ordinary consumer good. 0 c. the quantity of loanable funds demanded rises as the real interest rate falls, and vice versa. 0 d. the law of demand makes it impossible for the cu we to be upward sloping. The components of the financial account of a country's balance of payments include: O a. Foreign purchases of assets in the country O b. Purchase of assets the country has made abroad O c. Country's net international investment position O d. A and B only O e. All of the aboveThe supply of loanable funds is determined by the: O a. extent of foreign saving that is invested in Canadian financial markets. O b. extent of government saving. O c. willingness of households to save. O d. all of the aboveThe demand for loanable funds is determined by: O a. the willingness of firms to borrow money to engage in new investment projects. O b. the amount of reserves made available by the Bank of Canada. O c. the government budget deficit. O d. the value of the stock market.In the loanable funds model, the supply curve is upward sloping because: Oe. the higher the real interest rate, the greater the reward to saving and hence the larger the quantity of funds households will save. a higher real interest rate increases the foreign exchange value of the dollar, which reduces net exports and, as a consequence, increases the quantity of foreign saving available to the domestic loanable funds market. an increase in the real interest rate increases government saving by inducing governments to curtail spending, thereby reducing budget deficits or increasing surpluses. All of the above. A and B but not C. Why doesn't purchasing power parity hold exactly? (Check all that apply.) C] a. Profit is not considered a worthy pursuit in many countries. C] b. Products differ across countries as firms adapt products to local tastes. C] c. Not all products are traded internationally. C] d. Barriers to trade are often imposed by countries