An economic benefit of capital outflows is that they
A)create future income payment inflows.
B)increase domestic investment.
C)reduce domestic saving.
D)reduce domestic unemployment.

Question

Quizplus · Accepted Answer

Capital outflows can lead to future income payment inflows since the invested capital can generate profits or dividends that will eventually flow back into the domestic economy. This can contribute to economic growth and development. However, options B, C, and D are not accurate since capital outflows can also reduce domestic investment, increase domestic saving, and potentially lead to job losses due to less available funds for domestic investment and spending.

An Economic Benefit of Capital Outflows Is That They