Answer
a) U.S. net capital outflow increases since the investment will be in a foreign country, and this is a direct investment.
b) U.S. net capital outflow increases since the investment will be in a foreign country, and this is a portfolio investment.
Work Step by Step
c) U.S. net capital outflow decreases since the investment will be in the country, and this is a direct investment.
d) Assuming the stock is sold in U.S. dollars (and not euros), U.S. net capital outflow decreases since the investment will be in the country, and this is a portfolio investment.
