Which of the following is correct?
A)capital flight from the United States decreases net capital outflow
B)an increase in the government budget deficit creates no change in net capital outflow
C)if the U.S.imposes a restriction on imports,net capital outflow increases
D)None of the above is correct.

Question

Quizplus · Accepted Answer

None of the given options are correct. 
A) Capital flight refers to the movement of large sums of money out of a country due to political or economic instability. This will increase net capital outflow, not decrease it.
B) An increase in government budget deficit can lead to an increase in borrowing from foreign countries, which would increase net capital outflow.
C) Restriction on imports would decrease imports and increase exports, leading to an increase in net capital inflow.

Which of the Following Is Correct