If a country's trade surplus falls, its net capital outflow rises.

Question

Quizplus · Accepted Answer

A country's trade surplus falling does not necessarily mean its net capital outflow rises. Trade surplus is the difference between a country's exports and imports, while net capital outflow is the difference between domestic investments abroad and foreign investments in the domestic economy. These two are related but not directly proportional; changes in one do not automatically lead to specific changes in the other.

If a Country's Trade Surplus Falls, Its Net Capital Outflow