Which of the following statements about the loanable funds market is incorrect?

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A reduction in a nation's net capital outflow causes the demand curve for loanable funds to shift leftward.An increase in domestic investment leads to a rightward shift in the demand for loanable funds.A rise in a country's net capital outflow results in the supply of loanable funds shifting to the left.An increase in net capital outflow in a country causes its real interest rate to increase.

Explanation

Option A is incorrect because a decrease in net capital outflow actually reduces the supply of loanable funds, leading to a leftward shift in supply, not demand. Options B, C, and D correctly describe how changes in investment and net capital outflow affect the demand and supply in the loanable funds market and the real interest rate.