In one year the United States had a current account deﬁcit of $461 billion. The balance on the capital account was −$8 billion. What was the balance on the ﬁnancial account?

Question

Quizplus · Accepted Answer

By definition, the sum of the current account, capital account, and financial account balances must equal zero. Therefore, we can use the formula:
financial account balance = -(current account balance + capital account balance)
financial account balance = -(461 billion - 8 billion)
financial account balance = -453 billion
However, the question asks for the balance on the financial account, not the opposite. To get the balance in the correct direction, we need to switch the sign to positive:
financial account balance = $453 billion
Therefore, the answer is B, +$469 billion.

In One Year the United States Had a Current Account