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Real Interest Rates and International Capital Flows

Ava Garcia

Ava Garcia

7 min read

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Study Guide Overview

This study guide covers international capital flows, including inbound and outbound flows, driven by differences in real interest rates. It explains the relationship between real interest rates and capital flows, their impact on the foreign exchange market and the loanable funds market, and provides practice questions (multiple-choice and free-response) to test comprehension of these concepts.

Question 1 of 6

Ready to boost your AP Macro score? ๐Ÿš€ Which of the following BEST describes capital flow?

The movement of goods across borders

The movement of people across borders for work

The movement of money across borders for investment, trade, or production

The change in a country's population over time