Figure 13.1. U.S. Capital and Financial Account

-Refer to Figure 13.1.Upward movements along U.S.capital and financial account schedule CA? would be caused by:
A) U.S. interest rates rising relative to foreign interest rates
B) U.S. interest rates falling relative to foreign interest rates
C) Taxes placed on income earned by U.S. residents from their foreign investments
D) Taxes placed on income earned by foreign residents from their U.S. investments

Question

Figure 13.1. U.S. Capital and Financial Account
 
-Refer to Figure 13.1.Upward movements along U.S.capital and financial account schedule CA? would be caused by:
A) U.S. interest rates rising relative to foreign interest rates 
B) U.S. interest rates falling relative to foreign interest rates 
C) Taxes placed on income earned by U.S. residents from their foreign investments 
D) Taxes placed on income earned by foreign residents from their U.S. investments

Quizplus · Accepted Answer

Upward movements along the U.S. capital and financial account schedule CA? would be caused by U.S. interest rates rising relative to foreign interest rates. This would make U.S. assets more attractive to foreign investors and result in an increase in capital inflows, leading to an upward movement along the schedule.