If foreign residents purchase 30 billion pesos of Mexican assets and Mexican residents purchase 25 billion pesos of foreign assets, then Mexico has a net capital outflow of 5 billion pesos.

Question

Quizplus · Accepted Answer

Net capital outflow is calculated as the difference between the purchase of foreign assets by residents and the purchase of domestic assets by foreigners. In this case, it would be -5 billion pesos, indicating a net capital inflow, not outflow.

If Foreign Residents Purchase 30 Billion Pesos of Mexican Assets