The capital account balance equals foreign purchases of U.S.assets minus U.S.purchases of foreign assets.
The capital account balance measures the purchases of American assets by foreigners and American purchases of foreign assets.

Question

Quizplus · Accepted Answer

The statements in the question are true. The capital account balance is a measure of the net flow of capital between a country and the rest of the world, and it is calculated as foreign purchases of U.S. assets minus U.S. purchases of foreign assets. This balance reflects the demand for American assets by foreigners and American demand for foreign assets.

The Capital Account Balance Equals Foreign Purchases of U