The large, positive net capital outflow in Canada from 1999 until 2009 was primarily the result of government budget surpluses.

Question

Quizplus · Accepted Answer

When a government runs a budget surplus, it means that it is saving more money than it is spending. This excess savings can be invested abroad, resulting in a net capital outflow. Therefore, government budget surpluses can contribute to a large, positive net capital outflow in a country.

The Large, Positive Net Capital Outflow in Canada from 1999