When the U.S. real interest rate falls, purchasing U.S. assets becomes a. less attractive and so U.S. net capital outflow rises.b. less attractive and so U.S. net capital outflow falls.c. more attractive and so U.S. net capital outflow rises.d. more attractive and so U.S. net capital outflow falls.

When the U.S. real interest rate falls, purchasing U.S. assets becomes
a. less attractive and so U.S. net capital outflow rises.b. less attractive and so U.S. net capital outflow falls.c. more attractive and so U.S. net capital outflow rises.d. more attractive and so U.S. net capital outflow falls.

Answer

• less attractive and so U.S. net capital outflow rises.
  Explanation:
  With less real interest rates, foreign investors gain less interests investing in U.S, which makes it less attractive for them. More U.S citizens will as well choose not to purchase assets in the U.S with low interest rates. When less foreign investors are investing in U.S, the amount of assets leaving the U.S will be higher than the amount of assets entering the economy.