Question : Which of the following is not an example of a capital inflow?
Option 1: Foreign direct investment
Option 2: Purchase of domestic assets by foreigners
Option 3: Repatriation of profits by domestic firms from foreign operations
Option 4: foreign aid received by a country
Correct Answer: Repatriation of profits by domestic firms from foreign operations
Solution : The correct answer is (c) Repatriation of profits by domestic firms from foreign operations
Repatriation of profits by domestic firms from foreign operations is not an example of a capital inflow. It refers to the transfer of profits earned by domestic firms from their foreign subsidiaries or operations back to the home country. This represents a capital outflow rather than an inflow.
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