Higher real interest rates in Country X cause capital to:

Selling bonds is a method the government uses to finance its operations, but it does not inherently increase national debt. Instead, it is the result of a deficit that prompts the sale of bonds. Thus, while bonds can be a tool for managing debt, they do not cause an increase in national debt on their own.

A balanced budget occurs when government revenues equal expenditures, meaning no deficit exists. In this scenario, national debt does not increase as there is no need for borrowing. Therefore, a balanced budget is contrary to the conditions that lead to rising national debt.

While falling interest rates can reduce the cost of servicing existing debt, they do not contribute to an increase in national debt. Instead, lower interest rates might encourage borrowing, but without a rising deficit to begin with, they cannot cause an increase in debt levels.