Suppose That the Real Return from Operating Factories in Ghana

Multiple Choice

Suppose that the real return from operating factories in Ghana rises relative to the real rate of return in Canada. Which of the following best describes the effects of this transaction?

A) This will increase Canadian net capital outflow and decrease Ghanian net capital outflow.
B) This will decrease Canadian net capital outflow and increase Ghanian net capital outflow.
C) This will only increase Canadian net capital outflow.
D) This will only increase Ghanian net capital outflow.