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2. The accompanying diagram shows foreign-owned assets in Canada and Canadian-owned assets abroad, Percent of rest-of-the-world GDP 3.5% 3 Krugman et al, Macroeconomics, Canadian 48,

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2. The accompanying diagram shows foreign-owned assets in Canada and Canadian-owned assets abroad, Percent of rest-of-the-world GDP 3.5% 3 Krugman et al, Macroeconomics, Canadian 48, 0 2021 Worth Publishers 2.5 2 Foreign-owned assets in Canada 1.5 1 0.5 Cdn-owned assets abroad 1990 1995 2000 2005 2010 2015 2020 Year Data from: Statistics Canada. both as a percentage of Canadian GDP. As you can see from the diagram, both increased, with foreign-owned assets in Canada rising by 2.9 times and Canadian-owned assets abroad rising by about sevenfold from 1990 to the second quarter of 2020. a. As Canadian-owned assets abroad increased as a percentage of Canadian GDP, does this mean that Canada, over the period, experienced net capital outflows? b. Does this diagram indicate that world economies were more tightly linked in 2020 than they were in 1990

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