Answer:
Option B
U.S. net capital outflow is $300 billion; capital is flowing out of the U.S.
Explanation:
We can understand it better when we see it from the perspective of where the money is going to and coming from.
If U.S. residents purchase $600 billion worth of foreign assets, the money is going out from the U.S because residents are paying money to a foreign country for their assets.
From this, the U.S is losing $600 billion
If foreigners purchase $300 billion worth of U.S. assets. This means that money is coming from foreigners into the U.S because the funds will be paid to United States organizations.
This means that the U.s is gaining $300 billion
To get the net flow of cash, we subtract the inflow and the outflow. this will give $300 billion - $ 600 billion. Which is = $300 billion outflow.
Hence the U.S. net capital outflow is $300 billion and capital is flowing out of the U.S.
