Popular Courses
ECON 203
Concordia University
Macroeconomics
University Study Guides
AP Macroeconomics Exam Prep Course
AP Exam Prep
Macroeconomics
General Course
ECON 102
University of British Columbia
ECON 1100
University of Guelph
Macroeconomics
University Study Guides
ECON 203
University of Calgary
ECON 102
University of Alberta
ECO102H1
University of Toronto
ECO 1102
University of Ottawa
ECON 1BB3
McMaster University
ECON 1010
York University
ECON 110B
Queen's University
ECON 105
Simon Fraser University
ECON 1102
Dalhousie University
ECON 1002
Carleton University
ECON 1BA3
McMaster University
ECON 330
McGill University
ECON 104
Pennsylvania State University
0:00 / 0:00
Capital Flight
Capital Flight is when there is a large and sudden reduction in the demand for assets from a country. It can be caused by political instability. This country will have to pay a higher risk premium on its financial assets (bonds).
- This would cause supply of loanable funds to shiftleft. The higher risk premium would could cause the interest rate to go higher and the net capital outflow (NCO) toincrease.
- The supply of dollars shifts to theright
- The dollar willdepreciateand net exports willincrease.
