Borrowing from another country that occurs when the country has a trade deficit and its citizens sell real and financial assets to foreigners is called a capital inflow.

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This statement accurately describes a capital inflow, which is the flow of funds coming into a country from foreign sources as a result of investment in its financial or physical capital. When a country has a trade deficit, it means that it is importing more goods and services than it is exporting, leading to a loss of foreign currency reserves. As a result, its citizens may sell real and financial assets to foreigners in exchange for foreign currency to finance their current account deficit, thereby resulting in a capital inflow.

Borrowing from Another Country That Occurs When the Country Has