Capital flight
A) Decreases a country's net exports and increases its long-run growth path.
B) Increases a country's net exports and increases its long-run growth path.
C) Increases a country's net exports and decreases its long-run growth path.
D) Decreases a country's net exports and decreases its long-run growth path.

Question

Quizplus · Accepted Answer

Capital flight leads to a depreciation of the country's currency, making exports cheaper and thus increasing net exports. However, it also indicates a lack of confidence in the country's economy, which can decrease its long-run growth path.

Capital Flight