If a Reduction in Government Borrowing Leads to Lower Real

Multiple Choice

If a reduction in government borrowing leads to lower real interest rates in the United States,

A) U.S. investors will decrease their investments abroad.
B) U.S. exports will decrease relative to imports.
C) the inflow of loanable funds from abroad will moderate the fall in the real rate of interest.
D) the dollar will depreciate in the foreign exchange market.