A capital outflow occurs when:
A) money saved domestically is invested in another country.
B) money saved in another country finances domestic investment.
C) there is a negative difference between capital inflows and capital outflows for a country.
D) there is a positive difference between capital inflows and capital outflows of a country.

Question

Quizplus · Accepted Answer

A capital outflow occurs when domestic savings are invested in foreign assets or used to purchase imports. This can happen through various channels, such as direct investment, portfolio investment, or foreign aid. Option B refers to capital inflows, while options C and D describe the balance of payments, which can be either positive or negative.

A Capital Outflow Occurs When