According to the open-economy macroeconomic model,if the U.S.government budget deficit increases,then both U.S.domestic investment and U.S.net capital outflow would decrease.

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According to the open-economy macroeconomic model, an increase in the government budget deficit would lead to an increase in the real interest rate, which would in turn decrease domestic investment and increase foreign investment, thereby leading to a decrease in U.S. net capital outflow. Therefore, both U.S. domestic investment and U.S. net capital outflow would decrease with an increase in the government budget deficit.

According to the Open-Economy Macroeconomic Model,if the U