Final answer:
Without international capital flows, the U.S. would see less funding available and higher costs of funding across all risk levels due to a reduced supply of capital and increased competition for funds.
Step-by-step explanation:
Regarding the question about international capital flows and their impact on funding availability and cost in the United States, the answer would be: Without international capital flows, there would be less funding available in the United States across all risk levels, and the cost of funding would be higher regardless of the firm's risk level. This is because international capital flows bring additional financial capital into U.S. markets, which increases the supply of funds. With a larger supply, the cost of capital (interest rates) typically decreases, while availability increases. When capital flows are restricted, the supply of funds is more limited, and, consequently, the cost of accessing funds goes up as firms compete for the smaller pool of available capital.
From the context provided, it's clear that the supply and demand of financial capital affect the rates of return and risk levels for investments. International investments, as sources of capital, diversify and increase the overall quantity of financial capital. This competition among investments leads to a market where companies have to offer more attractive (or at least competitive) rates of return, adjusted for risk, to secure funding.