When net capital flows are negative,
A)capital inflows are less than capital outflows.
B)net foreign investment is negative.
C)the current capital account balance is negative.
D)capital outflows are less than capital inflows.
E)A and B are both correct.

Question

Quizplus · Accepted Answer

When net capital flows are negative, it means that capital outflows are greater than capital inflows. Therefore, option A) is the correct choice. Option B) implies that net capital flows are equal to net foreign investment, which is not necessarily true. Option C) refers to the current capital account balance, which may or may not be negative depending on other factors. Option D) is the opposite of option A), and is therefore incorrect.

When Net Capital Flows Are Negative