When interest rates in the U.S. decline, we can expect capital:
A) inflows and outflows to decrease.
B) inflows and outflows to increase.
C) inflow to decrease, and outflow to increase.
D) outflow to decrease, and inflow to increase.

Question

Quizplus · Accepted Answer

When U.S. interest rates decline, foreign investors may seek higher returns elsewhere, leading to decreased capital inflows, while U.S. investors may invest more abroad, increasing capital outflows.

When Interest Rates in the U