In a model with two large open economies, the world real interest rate is such that A. desired international lending by one country equals desired international borrowing by the other country. B. desired international borrowing will be the same in both countries. C. desired international lending will be the same in both countries. D. desired international lending and borrowing will be zero in both countries.

A. desired international lending by one country equals desired international borrowing by the other country.

Explanation:

Rate of return can be defined as the percentage of interest or dividends earned on money that is invested.

In Financial accounting, a return refers to the amount of profit generated by an investor on an investment over a specific period of time.

Basically, the rate of return which is typically expressed as a percentage of the initial costs of an investment can either be a gain or a loss on an investment. Therefore, a positive rate of return on an investment over a specific period of time, simply means that an investor is making a profit (gains) while a negative rate of return on an investment over a specific period of time, indicates that the investor is running at a loss.

In a model with two large open economies, the world real interest rate is such that desired international lending by one country equals desired international borrowing by the other country.

Thus, the willingness of one country to lend is met by an equal willingness of another country to borrow.

answer; microeconomics;