How has rising productivity in the United States affected the balance on capital account?

Question

Quizplus · Accepted Answer

Rising productivity in the United States has made the country more attractive to foreign investors, leading to an increase in the surplus on capital account. This is because foreign investors are more willing to invest in a country that has higher productivity as it indicates a higher potential return on their investment. Additionally, the increased productivity can lead to lower production costs, which can make U.S. goods and services more competitive in international markets, further attracting foreign investors.

How Has Rising Productivity in the United States Affected the Balance