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If there is an increase in the world real interest rate, which of the following is correct? The following diagram shows a small open economy.

If there is an increase in the world real interest rate, which of the following is correct?

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The following diagram shows a small open economy. r NS NS, I If there is an increase in the world real interest rate, which of the following is correct?O (a) The NS curve will shift outwards (to the right). O (b) The I curve will shift inwards (to the left). O (c) Both (a) and (b) will occur. O (d) The economy's balance of trade deficit will increase. O (e) The economy's balance of trade deficit will decrease

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