Which of the following is an example of U.S. foreign direct investment and by itself increases...

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.

Solutions

Expert Solution

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.

Rahul Sunny answered 2 years ago

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