Suppose that the real return from operating factories in Ghana rises relative to the real rate of return in the United States. Other things the same,
A)this will increases U.S. net capital outflow and decrease Ghanan net capital outflow.
B)this will decreases U.S. net capital outflow and increase Ghanan net capital outflow.
C)this will only increase U.S. net capital outflow.
D)this will only increase Ghanan net capital outflow.

Question

Quizplus · Accepted Answer

When the real return from operating factories in Ghana rises relative to the U.S., investors are more likely to invest in Ghana, increasing U.S. net capital outflow and decreasing Ghanaian net capital outflow.

Suppose That the Real Return from Operating Factories in Ghana