One reason that we might observe a rise in net capital outflow could be interest rates in the:
A) rest of the world are declining, relative to the U.S.
B) U.S. are declining, relative to the rest of the world.
C) U.S. and the world are all declining.
D) U.S. and the world are all increasing.

Question

Quizplus · Accepted Answer

When U.S. interest rates decline relative to the rest of the world, it becomes less attractive for investors to hold U.S. assets, leading to an increase in net capital outflow as investors seek higher returns elsewhere.

One Reason That We Might Observe a Rise in Net