Most of the current account deficit is financed by the intervention of the Federal Reserve in international transactions.

Question

Quizplus · Accepted Answer

The current account deficit is typically financed by foreign investors, who invest in US assets such as stocks, bonds, and real estate. The Federal Reserve may intervene in certain circumstances to influence exchange rates, but they do not typically finance the current account deficit through direct interventions in international transactions.

Most of the Current Account Deficit Is Financed by the Intervention