Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had flexible exchange rates, what effect would these flows have had on Venezuela's overall balance and reserves account?
a. Overall balance would rise and reserves account would fall.
b. Overall balance and reserves account would both equal zero.
c. Overall balance would fall and reserves account would equal zero.
d. Overall balance would equal zero and reserves account would fall.
e. Overall balance would fall and reserves account would rise.
.B
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