When a French vineyard establishes a distribution center in the U.S., U.S. net capital outflow
A)increases because the foreign company makes a portfolio investment in the U.S.
B)declines because the foreign company makes a portfolio investment in the U.S.
C)increases because the foreign company makes a direct investment in capital in the U.S.
D)declines because the foreign company makes a direct investment in capital in the U.S.

Question

Quizplus · Accepted Answer

When a French vineyard establishes a distribution center in the U.S., it is making a direct investment in capital in the U.S., which decreases U.S. net capital outflow.

When a French Vineyard Establishes a Distribution Center in the U.S