When the U.S.real interest rate falls,owning U.S.assets is
A)less attractive and so U.S.net capital outflow rises.
B)less attractive and so U.S.net capital outflow falls.
C)more attractive and so U.S.net capital outflow rises.
D)more attractive and so U.S.net capital outflow falls.

Question

Quizplus · Accepted Answer

When the U.S. real interest rate falls, U.S. assets become less attractive to investors because they offer lower returns. As a result, investors may seek higher returns elsewhere, leading to an increase in U.S. net capital outflow.

When the U.S.real Interest Rate Falls,owning U.S.assets Is