If Kenya experienced capital flight, which of the following best explains the effects?
A)The supply of Kenyan schillings curve would shift left, which would make the real exchange rate of the Kenyan schilling appreciate.
B)The supply of Kenyan schillings curve would shift left, which would make the real exchange rate of the Kenyan schilling depreciate.
C)The supply of Kenyan schillings curve would shift right, which would make the real exchange rate of the Kenyan schilling appreciate.
D)The supply of Kenyan schillings curve would shift right, which would make the real exchange rate of the Kenyan schilling depreciate.

Question

Quizplus · Accepted Answer

Capital flight involves investors moving their assets out of a country, increasing the supply of the local currency in the foreign exchange market, which typically leads to depreciation of the currency.

If Kenya Experienced Capital Flight, Which of the Following Best