Which of the following factors probably does not directly affect a country's capital account and its components?

Question

Quizplus · Accepted Answer

Inflation does not directly affect a country's capital account and its components. The capital account mainly deals with investments, loans, and transfers between countries. Inflation may indirectly affect the capital account through its impact on exchange rates and interest rates. However, it is not a direct factor that affects the capital account. The other options, including interest rates, withholding taxes on foreign income, and exchange rate movements, have a direct impact on a country's capital account and its components.

Which of the Following Factors Probably Does Not Directly Affect