An increase in the real interest rate in the United States changes the quantity of loanable funds demanded because
a. U.S. residents will want to buy more foreign assets.
b. Foreign residents will want to buy more U.S. goods and services.
c. U.S. firms will want to purchase fewer U.S. capital goods.
d. All of the above are correct.
c
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The equilibrium price and quantity in a free market usually reflect private marginal costs and benefits, not social ones
a. True b. False
Direct foreign investment in the LDCs
a. explains whatever economic growth the LDCs had in the last quarter of the 20th century b. pushes the production possibilities curve inward toward the origin because resources are being diverted from the LDCs' own production activities c. leads to substantial LDC debt to rich nations d. cannot help the LDCs and can actually hinder their development because LDCs become reliant on it e. can help the LDCs but cannot be a substitute for their own development efforts