We might observe a rise in U.S. net capital outflow when interest rates are:
A) declining in the rest of the world relative to the United States.
B) declining in the United States relative to the rest of the world.
C) declining across the globe.
D) rising across the globe.

Question

Quizplus · Accepted Answer

When interest rates in the United States are declining relative to the rest of the world, investors may seek higher returns elsewhere, leading to increased capital outflows from the United States. A rise in U.S. net capital outflow would not necessarily occur if interest rates are declining in the rest of the world or if interest rates are rising globally.

We Might Observe a Rise in U