For any country, net exports are always equal to net capital outflow because every international transaction involves an exchange of an equal value of some combination of goods and assets.

Question

Quizplus · Accepted Answer

Net exports (exports minus imports) must equal net capital outflow (the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners) because the value of goods and services traded internationally is balanced by the flow of capital.

For Any Country, Net Exports Are Always Equal to Net