A decrease in capital outflows from Australia will:
A)decrease the balance on the financial account.
B)increase the balance on the financial account.
C)increase the balance on the capital account.
D)decrease the balance on the current account.

Question

Quizplus · Accepted Answer

Capital outflows represent investments made by Australian residents in foreign countries. A decrease in capital outflows means that fewer investments are being made outside of Australia. Therefore, more funds are being retained in Australia, leading to an increase in the balance on the financial account.

A Decrease in Capital Outflows from Australia Will