Net capital outflow measures the imbalance between the amount of
A)foreign assets held by domestic residents and domestic assets held by foreign residents.
B)foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
C)foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Net capital outflow measures the difference between the amount of domestic assets bought by foreigners and the amount of foreign assets bought by domestic residents, which is represented by option B. Option A describes the current account, while option C describes the trade balance. Therefore, the correct answer is B.

Net Capital Outflow Measures the Imbalance Between the Amount of