For any given country, net capital outflows to all other countries equal:
A) net exports to all other countries.
B) net capital inflows from all other countries.
C) national savings.
D) net foreign direct investment to all other countries.

Question

Quizplus · Accepted Answer

Net capital outflows for a country equal its net exports to all other countries. This is because when a country exports more than it imports, it essentially lends the difference to the rest of the world, which is recorded as a net capital outflow. Conversely, when a country imports more than it exports, it borrows the difference from the rest of the world, resulting in a net capital inflow. This relationship is a fundamental aspect of the balance of payments, where the current account (which includes net exports) and the financial account (which includes net capital outflows) should theoretically balance.

For Any Given Country, Net Capital Outflows to All Other