When interest rates in the U.S.decrease,we can expect:
A)NCO to decrease,because capital inflow is increasing.
B)NCO to increase,because capital inflow is decreasing.
C)NCO to decrease,because capital inflow is decreasing.
D)NCO to increase,because capital inflow is increasing.

Question

Quizplus · Accepted Answer

When U.S. interest rates decrease, domestic assets become less attractive to foreign investors, leading to a decrease in capital inflow and an increase in Net Capital Outflow (NCO) as domestic investors seek higher returns abroad.

When Interest Rates in the U.S.decrease,we Can Expect