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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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.
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