Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital and financial account changed?
What will be an ideal response?
Since the early 1980s, the U.S. current account has been negative and sometimes quite large. The U.S. capital and financial account has more or less mirrored the current account, only it has been positive rather than negative. Thus when the current account deficit is small, the capital and financial account surplus is small and when the current account deficit is large, the capital and financial account surplus is large.
You might also like to view...
A system of accounts that measures the transactions of goods, services, income, and financial assets between domestic households, businesses, and governments and residents of the rest of the world during a specific time period is the
A) capital account. B) current account. C) balance of payments. D) balance of trade.
As the amount of a variable input increases, while all other inputs are held constant, total product will
A) always increase. B) always decrease. C) initially decrease and then increase. D) initially increase and then decrease.