Purchases of government securities in the United States by foreigners is ?
Correct answer: C. a credit item in the capital account
- A. a credit item in the current account
- B. a debit item in the capital account
- C. a credit item in the capital account
- D. a debit item in the current account
Explanation
When foreigners buy U.S. government securities, the United States receives foreign funds and records a capital or financial inflow. In balance-of-payments bookkeeping, an inflow is a credit.
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