If Great Britain suffers from capital flight, British domestic investment will fall and British net exports will increase.

Question

Quizplus · Accepted Answer

Capital flight refers to the movement of funds out of a country in search of better returns or safer investment options. As a result, domestic investment in the country decreases, which can lead to a decrease in economic growth. However, with a weakened currency due to capital flight, exports become more competitive and can increase, leading to higher net exports.

If Great Britain Suffers from Capital Flight, British Domestic Investment