What is a potential outcome of high-interest rates in one country?

High-interest rates can indeed attract foreign capital investment. When a country's interest rates are high, it offers higher returns on investments such as bonds and savings accounts compared to other countries with lower rates. This could incentivize foreign investors to invest in that nation's financial markets or even to move capital into the country to take advantage of these better investment opportunities.

Countries with high-interest rates often become more appealing to international investors seeking to maximize their returns, which can lead to an influx of foreign capital. Not only does this capital come from individual investors, but it may also come from institutional investors seeking higher yields. Increased foreign investment can bolster a country's currency as demand rises, further supporting the notion that high-interest rates tend to draw in capital from abroad.