Net capital outflow refers to the purchase of
A)foreign assets by domestic residents minus the purchase of domestic assets by foreign residents.
B)foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents.
C)domestic assets by foreign residents minus the purchase of domestic goods and services by foreign residents.
D)domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.

Question

Quizplus · Accepted Answer

Net capital outflow measures the difference between the amount of domestic assets that are purchased by foreign residents and the amount of foreign assets that are purchased by domestic residents. Option A is the correct definition of net capital outflow. Options B and C are incorrect because they refer to purchases of goods and services rather than assets. Option D is incorrect because it has the signs reversed.

Net Capital Outflow Refers to the Purchase of