Paul,a U.S.citizen,builds a telescope factory in Israel.His expenditures
A)increase U.S.and Israeli net capital outflow.
B)increase U.S.net capital outflow,but decrease Israeli net capital outflow.
C)decrease U.S.net capital outflow,but increase Israeli net capital outflow.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Paul's investment in Israel represents an outflow of capital from the U.S. to Israel, increasing U.S. net capital outflow. For Israel, it represents an inflow of foreign capital, thus decreasing Israeli net capital outflow.

Paul,a U.S.citizen,builds a Telescope Factory in Israel.His Expenditures