From the U.S.point of view,drawing on (reducing)foreign bank balances in a New York bank represents a:
A) capital inflow
B) capital outflow
C) outflow of official reserves
D) debit in the current account

Question

Quizplus · Accepted Answer

Drawing on foreign bank balances in a New York bank represents a reduction in foreign assets held by the foreign bank and an increase in the U.S. financial account, thereby resulting in a capital outflow from the foreign country to the U.S.