When a Country Experiences Capital Flight, Which Statement Best Explains

question 116

Multiple Choice

When a country experiences capital flight, which statement best explains the effects?

• A) The interest rate falls because the demand for loanable funds shifts left.
• B) The interest rate falls because the supply for loanable funds shifts right.
• C) The interest rate rises because the demand for loanable funds shifts right.
• D) The interest rate rises because the supply for loanable funds shifts left.

---

Definitions:

Sale-or-return

A commercial arrangement where goods are delivered to a buyer who has the right to return the goods if they are not sold, within a stipulated period.

Voidable Title

A legal condition referring to a situation where a title or ownership can be invalidated at the discretion of one party due to certain conditions, such as fraud.

Void

A term applied to a contract that is not valid because its object is illegal or it has some defect that is so serious that it is not a contract.

CIF

Cost, Insurance, and Freight, a term used in international trade that indicates the seller is responsible for covering these expenses until the goods reach the purchaser's specified port of destination.