Question

If a country has positive net capital outflows, then its net exports are?

1) Positive
2) Negative
3) Zero
4) Cannot be determined

Answer 1

If a country has positive net capital outflows, then its net exports are negative.

Step-by-step explanation:

If a country has positive net capital outflows, then its net exports are negative. Net capital outflows refer to the flow of funds from a country to other countries for various purposes such as investments or loans. When a country has positive net capital outflows, it means that more funds are leaving the country than entering it, indicating that the country is investing or lending more abroad than it is receiving. This implies that the country is importing more than it is exporting, resulting in negative net exports.