If Toyota Inc.of Japan builds an automobile assembly plant in the United States, the Japanese capital account would register an outflow.

Question

Quizplus · Accepted Answer

When Toyota Inc. builds an automobile assembly plant in the United States, they will need to invest Japanese capital in the form of machinery, equipment, and possibly even human capital to set up and run the plant in the US. This will result in an outflow of Japanese capital, which will be recorded in the Japanese capital account.