Question

Net capital outflow Select one: a. is always less than net exports. b. could be any of the above. c. is always greater than net exports. d. is always equal to net exports.

Answer 1

Answer: d. is always equal to net exports.

Explanation:

The net exports of a country will always equal the net capital outflow of a country. The capital outflow of a country refers to financial assets going from a country to another country.

The reason the net exports and the capital outflows equal each other is that the financial assets will be used to pay for the imports that come into the country and the exports will represent the funds coming into the country so so the exports and imports determine the capital outflow which is why both metrics are the same.