Which of the following transactions leads to an inflow of funds on the U.S. financial account?

Question

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When a resident of China purchases U.S. government bonds, it leads to an inflow of funds on the U.S. financial account as money is flowing from China to the United States. Option A represents a capital outflow as the funds are used to purchase foreign stocks rather than investing within the United States. Option B represents a current account transaction where goods are being exported, but it does not affect the financial account. Option D represents a service trade transaction but doesn't involve a financial transaction or inflow of funds.

Which of the Following Transactions Leads to an Inflow of Funds