Other things equal, a rise in interest rates in one country leads to capital _____ that country, _____ its capital account surplus.
A) flowing into; increasing
B) flowing into; shrinking
C) flowing out of; increasing
D) flowing out of; shrinking

Question

Quizplus · Accepted Answer

A rise in interest rates in one country typically attracts foreign investment, leading to capital flowing into that country, which increases its capital account surplus.

Other Things Equal, a Rise in Interest Rates in One