Suppose foreigners increase their ownership of Canadian assets.What would this help to offset?

Question

Quizplus · Accepted Answer

If foreigners increase their ownership of Canadian assets, they would be investing in the Canadian economy, which would help to offset a deficit in the Canadian current account. The current account measures a country's imports and exports of goods and services, as well as investment income and unilateral transfers. If a country imports more than it exports, it runs a current account deficit. Foreign investment in Canadian assets would help to bring in funds to offset this deficit. However, it would not necessarily impact the financial account, which measures capital inflows and outflows, such as direct investment, portfolio investment, and loans.

Suppose Foreigners Increase Their Ownership of Canadian Assets