Suppose Judy, a Canadian citizen, opens an ice cream store in Bermuda. What would her expenditures be?
A) Canadian foreign portfolio investment that would increase Canadian net capital outflow
B) Canadian foreign portfolio investment that would decrease Canadian net capital outflow
C) Canadian foreign direct investment that would increase Canadian net capital outflow
D) Canadian foreign direct investment that would decrease Canadian net capital outflow

Question

Quizplus · Accepted Answer

Judy is engaging in foreign direct investment by opening a physical store in Bermuda, which would increase Canadian net capital outflow. Option A and B refer to portfolio investment, which is a type of financial investment and not relevant in this scenario. Option D is incorrect because foreign direct investment increases net capital outflow, not decreases it.

Suppose Judy, a Canadian Citizen, Opens an Ice Cream Store