11. Assuming that all transactions are recorded, if the United States has an overall deficit (–) in its current account, what is the implication for the balances of the other accounts (capital and financial)? a. When added (FA + KA), they must be in surplus (+) by exactly the same amount. b. Their difference (FA – KA) is equal to the deficit (–) in the current account. c. When added (FA + KA), they will be in deficit by exactly the same amount. d. Their difference (FA – KA) must be equal to zero.

11. Assuming that all transactions are recorded, if the United States has an overall deficit (–) in its current account, what is the implication for the balances of the other accounts (capital and financial)? a. When added (FA + KA), they must be in surplus (+) by exactly the same amount. b. Their difference (FA – KA) is equal to the deficit (–) in the current account. c. When added (FA + KA), they will be in deficit by exactly the same amount. d. Their difference (FA – KA) must be equal to zero.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 44P: Imagine that the U.S. economy finds itself in the following situation: a government budget deficit...

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