Background: Capital flight, in economics, occurs when assets or money rapidly flow out of a country, due to an event of economic consequence. Such events could be an increase in taxes on capital or capital holders or the government of the country defaulting on its debt that disturbs investors and causes them to lower their valuation of the assets in that country, or otherwise to lose confidence in its economic strength.

This leads to a disappearance of wealth, and is usually accompanied by a sharp drop in the exchange rate of the affected country—depreciation in a variable exchange rate regime, or a forced devaluation in a fixed exchange rate regime.

This fall is particularly damaging when the capital belongs to the people of the affected country, because not only are the citizens now burdened by the loss in the economy and devaluation of their currency, but probably also, their assets have lost much of their nominal value. This leads to dramatic decreases in the purchasing power of the country's assets and makes it increasingly expensive to import goods and acquire any form of foreign facilities, e.g. medical facilities.

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: In which county the valuation of assets would be lower?
Answer: Venezuela

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: In which county the valuation of assets would be higher?
Answer: Bolivia

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Would Venezuela have lower or higher valuation of  assets?
Answer: lower

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Would Bolivia have lower or higher valuation of assets?
Answer: higher

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: In which country investors would lose confidence,  Venezuela or Bolivia?
Answer: Venezuela

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: In which country investors would retain confidence, Venezuela or Bolivia?
Answer: Bolivia

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Would Venezuela lose or retain confidence of the investors?
Answer: lose

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Would Bolivia lose or retain confidence of the investors?
Answer: retain

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Which country's currency exchange rate would drop?
Answer: Venezuela

Situation: As an economist Dan is interested in economies of South America. He has extensively studied two countries, Venezuela and Bolivia. His conclusion is Venezuela's 
economic policy had lead to capital flight. But Bolivia is a completely different story. Their economic policy did not lead to capital flight.

Question: Which country's currency exchange rate would not drop?
Answer: Bolivia