Assuming all other things unchanged, a higher UK real interest rate
A) Decreases UK net capital outflow because UK residents and foreigners prefer to invest in the UK
B) None of these answers
C) Decreases UK net capital outflow because UK residents and foreigners prefer to invest abroad.
D) Increases UK net capital outflow because UK residents and foreigners prefer to invest in the UK.

Question

Quizplus · Accepted Answer

A higher UK real interest rate makes UK investments more attractive, leading to decreased net capital outflow as both UK residents and foreigners prefer to invest in the UK.

Assuming All Other Things Unchanged, a Higher UK Real Interest