Explain the term Financial Account deficit, and give two reasons why a country may have such...

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Explain the term Financial Account deficit, and give two reasons why a country may have such...

Explain the term Financial Account deficit, and give two reasons why a country may have such a deficit.

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Answer 1

Answer #1

Financial account is a measurement of increases or decreases in international ownership of assets. The owners can be individuals, businesses, the government, or its cental bank.Theassets include investment, securities like stocks and bonds, and commodities suchas gold and hard currency.

financial account is a component of a country’s balance of payments that covers claims on or liabilities to nonresidents, specifically with regard to financial assets. Financial account components include direct investment, portfolio investment and assets broken down by sector.

Reasons for such Deficit may include

Overvalued exchange rates

Inflation

Borrowing money

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Answer 2

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Explain the term Financial Account deficit, and give two reasons why a country may have such...

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