Answer – the International flow of funds means the movement of cash transactions from one country to the other country. The international flow of funds mainly takes place when the trade between two and more countries takes place and the goods and services are being exchanged from one country to the other. Trade between two or more country are the activities that come under export and import activities and the internationalization of the goods and services or we can say globalization of products and services can take place. The main activities that can define the activities are related to the flow of funds from one place to the other are foreign direct investment, inflationary or deflationary pressure and import and export activities. The direct effect of the international funds flow is on the national income of the country that is gross domestic product or the per capita income and on the government policies, foreign direct investments and on the impacts of the inflations and rise in prices of the goods and the service in the countries where the transactions of international funds flow are more in nature. More transactions depict that the country is growing more and more.