Macroeconomics

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U.S. Balance of Payments from 2009-2012

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The US government had significant federal fiscal deficits in the 2009-2012 period. New Treasury bonds were issued; a significant percentage of them were purchased by foreign governments. Which of the following statements is consistent with that observation?

A

The United States must have had a trade surplus during those years, allowing them to earn foreign currency to buy the new government bonds.

B

The United States' current account must have been in surplus given this influx of foreign funds.

C

Both the current account and the capital/financial account of the United States would have had a deficit that was funded by the foreign savings.

D

The United States had a current account deficit. As a result, there was an in-flow of foreign savings, thus the United States had a surplus in its capital financial account.