A __________ occurs whenever the purchases of foreign financial claims by U.S. entities exceed the purchases of U.S. financial claims by foreigners.

Question

Quizplus · Accepted Answer

Net capital outflow refers to the amount of domestic assets that are purchased by foreign entities minus the amount of foreign assets that are purchased by domestic entities. If domestic entities are purchasing more foreign financial claims than foreigners are purchasing domestic financial claims, then there is a net capital outflow.

A __________ Occurs Whenever the Purchases of Foreign Financial Claims