Two Nations Are Located Next to One Another

Multiple Choice

Two nations are located next to one another.In Nation A,people are very thrifty and spend much less than their incomes; moreover,Nation A's government runs a balanced budget every year.In Nation B,people spend all of their incomes,but their government runs consistent deficits.Thus,

A) Nation A's extra savings would increase the supply of loanable funds to Nation B.
B) Nation B's government deficit would be a supply of loanable funds to Nation B.
C) Nation A's extra savings would increase the demand for loanable funds in Nation B.
D) Nation B would instantly default on all of its debt obligations.
E) Nation A's extra savings would decrease the supply of loanable funds to Nation B.