If foreign holdings of U.S.dollars decrease,holding all else constant,
A)the balance on the U.S.financial account will decrease.
B)the balance on the U.S.current account will decrease.
C)the balance on the U.S.capital account will decrease.
D)the U.S.balance of trade will decrease.

Question

Quizplus · Accepted Answer

A decrease in foreign holdings of U.S. dollars implies a reduction in foreign investment in U.S. assets, which would lead to a decrease in the U.S. financial account balance.

If Foreign Holdings of U