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true An increase in the purchases of foreign assets by a nation's firms would decrease the nation's capital deficit
What is capital deficit?
A capital account deficit occurs when a company's equity becomes negative. This indicates that the total value of liabilities exceeds the total value of assets.
A capital account deficit in your business means that more money is flowing out of the account than is being added to it. For example, if you added $10,000 to your capital account during the fiscal quarter but spent $12,000 from it, you would have a $2000 capital account deficit.
A capital account is a general ledger account used in accounting to record the owners' contributed capital and retained earnings—the total amount of a company's earnings since its formation, less the total dividends paid to shareholders.
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