Which of the following is not an outflow?

Correct option is A

​Correct Answer:(a) Loan from abroad​

A loan from abroad is not an outflow; it is an inflow of foreign capital into the domestic economy. When a country borrows from external sources, the funds enter the country, increasing foreign exchange reserves or liquidity. On the other hand, payments like settling debts, buying foreign assets, or investing in shares of foreign companies involve the outflow of money from the domestic economy to other countries.
​Information Booster
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• Loan from abroad: Foreign capital inflow, boosting reserves and investments.
  
• Payment of debts: Repayment of external borrowings, causing an outflow of funds.
  
• Buying assets abroad: Money spent on acquiring properties or businesses abroad is an outflow.
  
• Buying shares of foreign companies: Investment in equity markets abroad leads to foreign exchange outflow.
  
• Net capital inflows/outflows significantly impact a country's balance of payments (BoP).
  
• Inflows improve reserves, while outflows reduce liquidity in the domestic economy.
  

Additional Knowledge

• Loan from abroad: Often obtained through multilateral agencies (e.g., World Bank, IMF) or private lenders.
  
• Payment of debts: Includes principal and interest payments. Failure to pay can affect a country's credit rating.
  
• Buying assets abroad: Common in corporate expansion strategies (e.g., Indian companies buying foreign firms).
  
• Buying shares of foreign companies: Done through mechanisms like the Liberalized Remittance Scheme (LRS) in India.
  
• A sustainable balance of inflows and outflows is critical for economic stability.