At the equilibrium real interest rate in the open-economy macroeconomic model, the equilibrium quantity of loanable funds equalsa. net capital outflow.b. domestic investment.c. foreign currency supplied.d. national saving.

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05-12-2022
Business

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At the equilibrium real interest rate in the open-economy macroeconomic model, the equilibrium quantity of loanable funds equalsa. net capital outflow.b. domestic investment.c. foreign currency supplied.d. national saving.

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KrishnaMitra KrishnaMitra · Answer 1 · 2022-12-09T17:29:54-05:00

At the equilibrium real interest rate in the open-economy macroeconomic model, the equilibrium quantity of loanable funds equals national saving. So, option (d) will be the relevant answer.

Give a brief account on open economy.

A type of economy known as a "open economy" is one in which entities from other countries trade goods in addition to those produced domestically (goods and services). Technology transfers, managerial exchanges, and the exchange of a wide range of goods and services are all examples of trade. There are some exceptions that cannot be traded, such as a country's railway services, which cannot be exchanged for the service with another nation.

In contrast, a closed economy prohibits foreign trade and financial transactions. Exporting is the process of offering goods or services to customers in another nation. Importing is the process of acquiring products or services from a foreign nation. International trade refers to both importing and exporting.

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Give a brief account on open economy.

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