If the current account balance is $235 billion and U.S. official reserves increased by $35 billion, what is the official settlements account balance and the capital and financial account balance?
What will be an ideal response?
The official settlements account equals the negative of the change in official reserves, so the official settlements account balance is -$35 billion. Then, the sum of the current account balance plus the capital and financial account balance plus the official settlements account balance equals zero, which means that the capital and financial account balance must equal $200 billion.
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Answer the following statement true (T) or false (F)
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