When a Canadian exporter sells softwood lumber to the U.S.and uses the proceeds to buy stock in a U.S.company,Canadian exports ________ and there is a capital ________ Canada.

Question

Quizplus · Accepted Answer

When a Canadian exporter sells softwood lumber to the U.S. and uses the proceeds to buy stock in a U.S. company, Canadian exports increase, indicating an inflow of funds into Canada. However, the purchase of stock in the U.S. company is a capital outflow from Canada, as funds are being invested outside of the Canadian economy. Therefore, the best choice is A, where exports increase and there is a capital outflow from Canada.

When a Canadian Exporter Sells Softwood Lumber to the U