As the balance of payments in the financial account_____, the balance of payments on current account increases and the U.S. dollar _____.

Question

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When the balance of payments in the financial account decreases, it means that there are fewer investments in the United States. As a result, the demand for U.S. dollars decreases, causing it to depreciate. Meanwhile, the balance of payments on the current account (which includes trade in goods and services) increases, meaning that the United States is exporting more than it is importing. This results in an increase in demand for U.S. dollars, causing it to appreciate. Therefore, as the financial account decreases, the current account increases and the U.S. dollar depreciates.

As the Balance of Payments in the Financial Account_____, the Balance