How are foreign acquisitions of U.S. government securities classified in the balance of payments?

Show Answers

A credit entry in the current accountA debit entry in the capital accountA credit entry in the capital accountA debit entry in the current account

Explanation

When foreigners purchase U.S. government securities, it results in a capital inflow, which is recorded as a credit in the capital account of the balance of payments. It is not part of the current account, which deals with trade in goods and services.