A small country is an international borrower if its real interest rate without foreign borrowing is ________ the world real interest rate.
A) higher than
B) equal to
C) lower than
D) not comparable to
Question 2
Use the figure above to answer this question. Suppose the economy is operating at point a. A move to ________ could be explained by ________.
A) point e; a decrease in the nominal interest rate
B) point c; an increase in the nominal interest rate
C) point d; an increase in real GDP
D) point b; an increase in real GDP
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