1225EconomicsMedium
Which of the following statements regarding the loanable funds market is not true?
AA decrease in a country’s net capital outflow shifts the demand for loanable funds to the left
BAn increase in domestic investment shifts the demand for loanable funds to the right
CAn increase in a country’s net capital outflow raises its real interest rate
DAn increase in a country’s net capital outflow shifts the supply of loanable funds to the left
Correct answer
D. An increase in a country’s net capital outflow shifts the supply of loanable funds to the left
Explanation
The correct answer is An increase in a country’s net capital outflow shifts the supply of loanable funds to the left.