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Which of the Following Is True

Question 3

Multiple Choice

Which of the following is true?


A) When real interest rates are lower in country A than country B there will tend to be a capital flow from country B to country A.
B) Capital flows tend to move real interest rates in different countries toward equality.
C) Capital flows will tend to decrease real interest rates in countries with a capital outflow.
D) Both b. and c. are correct.

Correct Answer:

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