Suppose that in 2013, the U.S. runs a current account surplus of $514 billion. I

Question

Suppose that in 2013, the U.S. runs a current account surplus of $514 billion. If other factors did not affect the U.S. balance of international indebtedness, it would decrease by $514 billion during 2013.

Suppose that in 2013, the U.S. next external debt decreases by $393 billion from the previous year. Given the current account balance, which of the following can explain this outcome? Check all that apply.

A. The U.S. current account deficit was greater than the country's net borrowing.

B. U.S.-owned assets held abroad depreciated (lost value).

C. The net borrowing of the U.S. was greater than its current account deficit.

D. Foreign-owned assets in the U.S. appreciated (gained value).

Explanation / Answer

D

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