Scenario: Happyland
Happyland,a country of about 48 million people with beautiful beaches,vast natural resources,and a highly skilled labour force,is encouraging foreign direct investment inflows.The country has been exporting textiles,computer hardware,and software.The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad.
-If Happyland is successful at attracting foreign investment,transactions involving those investments would appear in the country's ________.
A)capital account
B)service account
C)income payments account
D)merchandise account

Question

Quizplus · Accepted Answer

Foreign direct investment inflows refer to the movement of capital resources from foreign investors to invest in a foreign country's capital assets, such as factories or equipment. Such investments are classified as capital transactions and appear in the capital account of the country's balance of payments.

Scenario: Happyland Happyland,a Country of About 48 Million People with Beautiful Beaches,vast