A capital inflow occurs when:
A) money saved domestically is invested in another country.
B) money saved in another country finances domestic investment.
C) more money is invested abroad than invested domestically.
D) money saved domestically is invested in a firm in the same industry.

Question

Quizplus · Accepted Answer

A capital inflow refers to the movement of capital (money or assets) from foreign countries into the domestic economy. This occurs when money saved in another country is used to finance domestic investments, such as investing in businesses, buying property or investing in financial assets.

A Capital Inflow Occurs When