If capital flows freely throughout the world, one would expect it would flow:
A) from the rich nations, where it is abundant and cheap, to the poor nations, where it is scarce and dear.
B) from the poor nations, where it has less value, to the rich nations, where it has more value.
C) from the savers to financial institutions.
D) from international lenders to international borrowers.

Question

Quizplus · Accepted Answer

According to basic economic principles, capital tends to flow from areas where it is abundant and cheap to areas where it is scarce and dear. In this case, the richer nations are likely to have more capital available, and therefore it is expected that capital would flow from these nations to the poorer nations where there are fewer resources available.

If Capital Flows Freely Throughout the World, One Would Expect