Debtors and creditors - External wealth Suppose that at the end of 2016, the val

Question

Debtors and creditors - External wealth Suppose that at the end of 2016, the value of U.S.-owned assets abroad is $17,516 billion, and the value of foreign-owned assets in the United States (which are U.S. liabilities) is $17,984 billion. What is the U.S. balance of international indebtedness in 2016? $17,516 billion  minus $468 billion minus $35,500 billion $468 billion minus$17,516 billion Suppose that In 2017, the United States runs a current account surplus of $357 billion. If other factors did not affect the U.S. balance of International Indebtedness, It would    ______during 2017. Suppose that during 2017, the U.S. net external debt decreases by $325 billion from the previous year. Given the current account balance, which of the following can explain this outcome? Check all that apply. The net borrowing of the United States was greater than its current account deficit. U.S.-owned assets held abroad depreciated (lost value). The U.S. current account deficit was greater than the country's net borrowing. Foreign-owned assets in the United States appreciated (gained value).

Explanation / Answer

1. The U.S balance of international indebtness in 2016 = $ 17,984 - $ 17,516 = $ 468 billion

2. U.S balance of international indebtedness in 2017 = $ 468 billion - $ 357 billion = $ 111 billion

3. i. U.S. owned assets held abroad depreciated

ii. Foreign owned assets in the United States appreciated

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