If domestic residents of France purchase 1.2 trillion euros of foreign assets and foreigners purchase 1.5 trillion euros of French assets, then France's net capital outflow is

a ...3 trillion euros, so it must have a trade deficit.

b ...3 trillion euros, so it must have a trade surplus.

c. -.3 trillion euros, so it must have a trade surplus.

d. -.3 trillion euros, so it must have a trade deficit.

Question

Business

Keagan Armstrong

9 May, 10:22

If domestic residents of France purchase 1.2 trillion euros of foreign assets and foreigners purchase 1.5 trillion euros of French assets, then France's net capital outflow is

a ...3 trillion euros, so it must have a trade deficit.

b ...3 trillion euros, so it must have a trade surplus.

c. -.3 trillion euros, so it must have a trade surplus.

d. -.3 trillion euros, so it must have a trade deficit.

+2

Answers (1)

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Natalie Mccarthy · Answer 1

b ...3 trillion euros, so it must have a trade surplus.

Explanation:

In order to have a trade surplus your exports must be greater than your imports. In this case imports were valued at 1.2 trillion euros and exports were valued at 1.5 trillion euros. As we can evidently see the exports are bigger than imports this is therefore a trade surplus and a surplus is always positive.