If a Japanese mutual fund buys a share of stock on the New York Stock Exchange, it will be accounted for as a(n) _____ account.
A) subtraction from the U.S. current
B) addition to the U.S. current
C) subtraction from the U.S. capital
D) addition to the U.S. capital

Question

Quizplus · Accepted Answer

When a Japanese mutual fund buys a share of stock on the New York Stock Exchange, it is considered a financial transaction that increases the U.S. capital account. This is because the purchase represents an inflow of capital from abroad into the U.S. financial markets.

If a Japanese Mutual Fund Buys a Share of Stock