In: Economics
Which of the following is an example of U.S. foreign direct investment and by itself increases U.S. net capital outflow?
A. A Swiss bank buys bonds issued by a U.S. company.
B. A French restaurant opens and operates a restaurant in New York.
C. A U.S. electronics company opens and operates a new factory in India.
D. A U.S. pension fund buys bonds issued by the Japanese government.
Option C. If an U.S. electronics
company opens and operates a new factory in India, then the Cash
will decrease in U.S., because Cash Outflow happens from U.S.
Investment Comes to India, cash Flow comes in.