If the demand for loanable funds increases, what will happen to real interest rates and the international value of the u.S. Dollar (usd)?
Answers
Answered by
2
If the demand for loanable funds increases real interest rate and the international value of the U.S. Dollar (USD) will increase as well.
you need to note that on the other hand, we can argue that in case the demand of loanable funds decreased, real interest rates would decrease.
Therefore we can conclude that if interest rates in US decreased, the obvious thing will be that the investors would move their money to some other country where they offer higher interest rates.
Similar questions