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A Small Country Is a Net Foreign Borrower and Its

Question 3

Multiple Choice

A small country is a net foreign borrower and its domestic demand for loanable funds increases.Consequently,the equilibrium quantity of loanable funds used in the country ________ and the country's foreign borrowing ________.


A) does not change; increases
B) does not change; does not change
C) increases; increases
D) increases; does not change

Correct Answer:

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