A capital inflow occurs when

Question

Quizplus · Accepted Answer

A capital inflow refers to the movement of funds from foreign residents into a country's economy through the purchase of domestic assets. Therefore, option C is the correct choice as it describes the scenario of a foreign resident purchasing a domestic asset, leading to a capital inflow. Options A, B, and D refer to transactions involving only domestic or foreign assets, without involving a foreign resident. Option E refers to an imbalance in the balance of payment, which may or may not coincide with a capital inflow.

A Capital Inflow Occurs When