8. The impact of international capital flows Suppose that the following graph depicts the market...
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8. The impact of international capital flows Suppose that the following graph depicts the market for funds in the US credit market. The blue line, labeled D, represents the demand for funds. The supply curve labeled s1 represents the supply curve of funds from American sources, with no foreign funds in the market. The supply curve label s2 represents the supply curve of funds from both American and foreign sources. Without influence from foreign sources of funds, the long-term equilibrium interest rate is %. With influence from foreign funds, the longterm equilibrium interest rate is %
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