Which of the following transactions leads to an inflow of funds on the U.S. capital account?

Question

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When a resident of China purchases U.S. government bonds, it leads to an inflow of funds on the U.S. capital account as the Chinese resident is investing in the U.S. economy. A purchase of a share of stock on the Hong Kong exchange (A) is a financial transaction that does not involve an inflow of funds into the U.S., as the U.S. resident is purchasing a share on a foreign exchange. Selling wheat to an African nation (B) is an example of a transaction on the current account of the balance of payments, as it represents a sale of goods, which does not necessarily result in an inflow of funds. Finally, a resident of Mexico visiting the United States (D) is an example of a service transaction on the current account, which also does not result in an inflow of funds.

Which of the Following Transactions Leads to an Inflow of Funds