Other things the same, a decrease in the U.K. real interest rate induces
A)British people to buy fewer foreign assets, which increases U.K.'s net capital outflow.
B)British people to buy more foreign assets, which reduces U.K.'s net capital outflow.
C)foreigners to buy fewer U.K.assets, which increases U.K.'s net capital outflow.
D)foreigners to buy more U.K.assets, which reduces U.K.'s net capital outflow.

Question

Quizplus · Accepted Answer

When the U.K. real interest rate decreases, U.K. assets become less attractive to foreigners, leading them to buy fewer U.K. assets, which increases the U.K.'s net capital outflow as capital leaves the country seeking higher returns elsewhere.

Other Things the Same, a Decrease in the U