The change in U.S. official reserves is equal to
A) borrowing from abroad plus the current account deficit.
B) the current account balance plus the capital and financial account balance.
C) the current account balance minus the capital and financial account balance.
D) foreign investment in the United States minus U.S. investment abroad.

Question

Quizplus · Accepted Answer

The change in U.S. official reserves is equal to the sum of the current account balance and the capital and financial account balance. This is because the balance of payments is composed of these two main accounts, and a change in official reserves is a way to balance any surplus or deficit between them.

The Change in U