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Which of the following transactions represents a capital inflow?

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Question

Which of the following transactions represents a capital inflow?

Options

  • Purchasing foreign assets

  • Importing machinery

  • Selling assets to foreigners

  • Repaying loans to foreign lenders

MCQ
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Solution

Capital inflows include receiving loans from abroad and selling assets to foreigners — both bring foreign exchange into the country and are recorded as Credit (+). Repaying loans and purchasing foreign assets are capital outflows.

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