Suppose Nicholas, a Greek citizen, opens a restaurant in Wasaga Beach, Ontario. What are the effects of this action?
A) It increases Canadian net capital outflow and has no effect on Greek net capital outflow.
B) It increases both Canadian and Greek net capital outflows.
C) It increases Canadian net capital outflow, but decreases Greek net capital outflow.
D) It decreases Canadian net capital outflow, but increases Greek net capital outflow.

Question

Quizplus · Accepted Answer

When Nicholas, a Greek citizen, invests in Canada by opening a restaurant, it represents an inflow of capital into Canada, thus decreasing Canadian net capital outflow. Conversely, it represents an outflow of capital from Greece, thus increasing Greek net capital outflow.

Suppose Nicholas, a Greek Citizen, Opens a Restaurant in Wasaga