What Does Net Capital Outflow Measure

question 155

Multiple Choice

What does net capital outflow measure?

• A) foreign assets held by domestic residents minus domestic assets held by foreign residents
• B) the imbalance between the amount of domestic assets bought by domestic residents and the amount of foreign assets bought by foreigners
• C) the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners
• D) domestic assets held by foreigners minus foreign assets held by domestic residents

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Definitions:

Economic Expansion

A phase of the business cycle where there is an increase in economic activity, marked by rising GDP, employment, and income levels.

Loanable Funds

The total amount of funds available for borrowing in the financial market, influenced by savings and investments.

Investment Spending

Expenditures made by businesses or individuals on capital goods, which are intended to create future benefits such as increased production or revenue.

Interest Rate

The segment of a loan accruing interest costs to the borrower, commonly presented as a yearly percentage of the ongoing loan total.