If a U.S.citizen deposits $10,000 in a foreign bank,and the bank uses the $10,000 to buy assets in the U.S. ,then ________.
A)the U.S.has experienced a net capital outflow
B)the U.S.has experienced an increase in net exports
C)the foreign economy has experienced a net capital outflow
D)the foreign economy has experienced an increase in net exports
E)none of the above

Question

Quizplus · Accepted Answer

The transaction results in no net capital outflow or increase in net exports for either economy, as the money is simply being cycled back into the U.S. economy.

If a USCitizen Deposits $10,000 in a Foreign Bank,and the Bank Uses