Consider the components of Canada's balance of payments accounts.The purchase of foreign assets by Canadians is,for Canada,considered a capital ________ and is recorded as ________.

Question

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The purchase of foreign assets by Canadians is considered a capital outflow because it involves the movement of domestic funds to foreign countries. This transaction is recorded as a debit on the capital account, which tracks capital flows between Canada and the rest of the world. The current account, on the other hand, records transactions related to trade in goods and services and investment income. Therefore, choices A, C, D, and E are incorrect.

Consider the Components of Canada's Balance of Payments Accounts