A foreign resident increasing her holdings of a U.S.financial asset causes a:

Question

Quizplus · Accepted Answer

Increasing holdings of a U.S. financial asset by a foreign resident is a form of foreign investment in the U.S., which is recorded as a credit in the U.S. private capital account. It does not affect the U.S. merchandise account or the current account as they reflect transactions related to trade in goods and services. It also does not result in a debit in the U.S. private capital account, as that would happen if a U.S. resident were to invest in foreign financial assets.

A Foreign Resident Increasing Her Holdings of a U