Between 1981 and 1988, which of the following happened to Canadian net capital outflow as a percent of GDP?
A)It became a larger, positive number.
B)It became a smaller, positive number.
C)It became a larger, negative number.
D)It became a smaller, negative number.

Question

Quizplus · Accepted Answer

The given options suggest that the net capital outflow could have become either a larger positive number or a larger negative number. However, since net capital outflow is calculated as the difference between capital outflow (money leaving the country) and capital inflow (money entering the country), a larger negative number indicates that more money was leaving the country than entering it, which implies a higher level of capital flight. Therefore, C is the best choice as it reflects a larger net capital outflow as a negative number, meaning that more money was flowing out of Canada during this period.

Between 1981 and 1988, Which of the Following Happened to Canadian