Which statement is consistent with negative net exports?
A) Net capital outflow is positive, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners.
B) Net capital outflow is positive, so Canadian assets bought by foreigners are greater than foreign assets bought by Canadians.
C) Net capital outflow is negative, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners.
D) Net capital outflow is negative, so Canadian assets bought by foreigners are greater than foreign assets bought by Canadians.

Question

Quizplus · Accepted Answer

Negative net exports indicate that a country is importing more goods and services than it is exporting. This means that there is a higher demand for foreign goods and currencies, which leads to an increase in the purchase of Canadian assets by foreigners. This results in a negative net capital outflow, as Canadian assets bought by foreigners are greater than foreign assets bought by Canadians.

Which Statement Is Consistent with Negative Net Exports