What is the correct equation for figuring out the capital-account balance?
A)Trade balance + services balance + unilateral
B)Federal government spending tax collections
C)Real interest rate + anticipated inflation
D)Foreign purchases of home assets home purchases of foreign assets

Question

Quizplus · Accepted Answer

The correct equation for figuring out the capital-account balance is foreign purchases of home assets
home purchases of foreign assets.
Key Takeaway: Within the balance of payments (BOP) statement, there are three types of balances: the merchandise trade balance, the current-account balance, and the capital-account balance. The capital-account balance takes into consideration assets that change ownership across international borders like capital, land, currency, and securities. The equation for figuring out the capital-account balance is to subtract home purchases of foreign assets from foreign purchases of home assets.

What Is the Correct Equation for Figuring Out the Capital-Account