A change in the U.S. balance of payments on financial account generates an equal and opposite reaction in the balance of payments on current account.

Question

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A change in the financial account of the balance of payments represents a change in the net foreign assets held by U.S. residents. This change must be offset by an equal and opposite change in the current account, which represents the net flow of goods and services between the U.S. and the rest of the world.

A Change in the U