Which of the following transactions represents an inflow of money on the financial account of the U.S. balance of payments?
A)Oil is imported from Venezuela.
B)United States firms pay dividends to foreigners.
C)United States citizens purchase foreign securities.
D)A Canadian firm increases its direct investment in its U.S. branch.

Question

Quizplus · Accepted Answer

A financial account inflow occurs when money flows into a country, such as when foreign entities invest in that country. In this case, a Canadian firm increasing its direct investment in its U.S. branch represents an inflow of money into the U.S., as it involves foreign capital being invested in the U.S. economy.

Which of the Following Transactions Represents an Inflow of Money