Capital tends to flow into markets earning short-run profits and out of markets suffering short-term losses.

Name: Capital tends to flow into markets earning short-run profits and out of markets suffering short-term losses.
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Question

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Capital mobility is driven by the search for higher returns, so investors often move their resources into markets where they perceive the potential for short-run profits and withdraw from those experiencing short-term losses to minimize their risk and maximize their returns.

Capital Tends to Flow into Markets Earning Short-Run Profits and Out