When a country experiences capital flight its a. net capital outflow decreases and its real exchange rate rises. b. net capital outflow increases and its real exchange rate rises. c. net capital outflow decreases and its real exchange rate falls. d. net capital outflow increases and its real exchange rate falls.

d. net capital outflow increases and its real exchange rate falls.

Explanation:

Capital flight is the sudden movement of large quantity of capital funds from one country to another country. This usually happens when foreign investors go back to their home county. It causes interest rate to increase and exchange rate decreases. Capital flight causes net capital outflow of a country to increase and its real exchange rate falls.

answer; balance sheets;