Simplify the Expression

question 3

Short Answer

Simplify the expression.

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Definitions:

Net Capital Outflow

The difference between the domestic country's investment abroad and foreign investments within the country.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield to investors.

U.S. Interest Rate

The benchmark interest rate set by the Federal Reserve in the United States, influencing the borrowing and lending rates across the economy.

Net Capital Outflow

Net capital outflow refers to the difference between the domestic investment in foreign assets and the foreign investment in domestic assets over a particular period.