When a foreign investor buys a bond either a U. S. firm or the federal government issues, or when a foreign firm builds a factory in the United States, the transaction is recorded in the balance of payments as

Question

Business

Taniyah Love

15 September, 10:46

When a foreign investor buys a bond either a U. S. firm or the federal government issues, or when a foreign firm builds a factory in the United States, the transaction is recorded in the balance of payments as

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Answers (1)

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Bethany Garrison · Answer 1

capital inflow

Explanation:

Based on the information provided within the question it can be said that in this scenario the payments should be recorded as capital inflow. In the context of business this refers to cash being received from abroad. Which in this scenario since the investor is a foreign person and he will be opening the factory in the US which is abroad for him, then the balance of payments will be coming in from abroad making them categorized as capital inflow.