An increase in the U.S.real interest rate induces
A) Americans to buy more foreign assets,which increases U.S.net capital outflow.
B) Americans to buy more foreign assets,which reduces U.S.net capital outflow.
C) foreigners to buy more U.S.assets,which reduces U.S.net capital outflow.
D) foreigners to buy more U.S.assets,which increases U.S.net capital outflow.

Question

Quizplus · Accepted Answer

An increase in the U.S. real interest rate makes U.S. assets more attractive to foreigners, leading them to buy more U.S. assets, which reduces U.S. net capital outflow.

An Increase in the U.S.real Interest Rate Induces