Long-term capital flows reflect the following factors EXCEPT:
A) short-term interest rate differentials.
B) fundamental economic expectations.
C) growth prospects.
D) perceptions of political stability.

Question

Quizplus · Accepted Answer

Long-term capital flows are focused on investment strategies that involve a longer timeline than short-term interest rate differentials. Therefore, short-term interest rate differentials are not a significant factor in long-term capital flows. Fundamental economic expectations, growth prospects, and perceptions of political stability are important determinants of long-term capital flows.

Long-Term Capital Flows Reflect the Following Factors EXCEPT