Suppose that the U.S.government acquires more foreign currency.How does this change affect the balance of payments accounts?

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When the U.S. government acquires more foreign currency, this is considered a negative transaction for the U.S. balance of payments accounts because it means more money is leaving the country than coming in. The official settlements account captures all transactions involving official government reserves, including foreign currency holdings, so a positive balance here would indicate that the U.S. has more reserves than it needs. The capital account measures cross-border asset transfers, so it is unlikely to be impacted by a government acquisition of foreign currency unless this directly affects foreign investment flows. Finally, while the balance of payments must always sum to zero by definition, the acquisition of additional foreign currency does not guarantee that all other transactions in the account will balance out to a positive value.

Suppose That the U