The things the same, as the real interest rate rises
a. domestic investment rises and net capital outflow falls.
b. domestic investment and net capital outflow both fall.
c. domestic investment and net capital outflow both rise.
d. domestic investment falls and net capital outflow rises.

the correct option is option b)

Explanation:

as the real interest rate rise the domestic investment and the net capital outflow both falls.

this is because rise in interest rate leads to decrease in the expenditure of the people and the demand of the goods and services  also decrease  which causes to reduce the inflation and this will affect the borrower a lot.

hence, the correct option is option b) fall in domestic investment and net out flow.

answer; positivist; postpositivist;