Purchases of foreign financial securities by U.S. residents and borrowing by foreigners from U.S. banks and other domestic sources are
A)current account inflows.
B)current account outflows.
C)capital inflows.
D)capital outflows.

Question

Quizplus · Accepted Answer

Purchases of foreign financial securities by U.S. residents represent capital outflows as money is leaving the U.S. to invest abroad. Similarly, borrowing by foreigners from U.S. banks is also a capital outflow as it involves U.S. capital being lent to foreign entities.

Purchases of Foreign Financial Securities by U