If a country experiences capital flight,which of the following curves shift right?
A)only the demand for loanable funds.
B)only the supply of dollars in the market for foreign-currency exchange.
C)only the net capital outflow curve and the supply of dollars in the market for foreign currency exchange.
D)the demand for loanable funds,the net capital outflow curve,and the supply of dollars in the market for foreign currency exchange.

Question

Quizplus · Accepted Answer

Capital flight is the movement of capital out of a country, which increases the supply of dollars in the market for foreign currency exchange and shifts the net capital outflow curve to the right. This also reduces the demand for loanable funds, shifting that curve to the right as well.

If a Country Experiences Capital Flight,which of the Following Curves