A nation has a positive net capital outflow.Which of the following is correct?
A)Purchases of foreign assets by domestic residents exceed purchases of domestic assets by foreigners
B)It has positive net exports.
C)Its savings exceeds its domestic investment.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A positive net capital outflow means that the amount of money flowing out of a country for investments in foreign assets is greater than the amount of money flowing into the country for investments in domestic assets. This implies that domestic residents are purchasing more foreign assets than foreigners are purchasing domestic assets, indicating choice A is correct. This also means that the country's savings are being invested in foreign assets rather than domestic ones, implying that choice C is correct. Additionally, a positive net capital outflow tends to be associated with a positive net export as it implies that the country is receiving more income from exports than it is spending on imports, hence choice B is correct. Therefore, option D is the correct answer.

A Nation Has a Positive Net Capital Outflow