When interest rates in the United States decline, we can expect capital inflows to _______ and capital outflows to _______.
A) decrease; decrease
B) increase; increase
C) decrease; increase
D) increase; decrease

Question

Quizplus · Accepted Answer

When interest rates in the United States decline, capital inflows tend to decrease because investors can get higher returns elsewhere, and capital outflows tend to increase as investors seek better returns in other countries.

When Interest Rates in the United States Decline, We Can