Ann,a U.S.citizen,uses some previously obtained euros to purchase a bond issued by a Spanish company.This transaction
A)increases U.S.net capital outflow by more than the value of the bond.
B)increases U.S.net capital outflow by the value of the bond.
C)does not change U.S.net capital outflow.
D)decreases U.S.net capital outflow.

Question

Quizplus · Accepted Answer

Since Ann is using previously obtained euros, there is no new capital flow from the U.S. to Spain, so U.S. net capital outflow does not change.

Ann,a USCitizen,uses Some Previously Obtained Euros to Purchase a Bond Issued