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Suppose that during a recent year for the United States, the current account balance was -$0.5...

Suppose that during a recent year for the United States, the current account balance was -$0.5 Trillion, and the net acquisitions of financial assets by the U.S. residents and government entities was +$0.1 Trillion. What was the balance on the financial account during the year? What was the net incurrence of financial liabilities by U.S. residents and government entities during the year?

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Answer #1

a) the balance on the financial account during the year = +0.5 trillion

b) balance of the financial account = net acquisition of financial assets - net incurrence of financial liabilities

the net incurrence of financial liabilities by U.S. residents and government entities during the year = net acquisition of financial assets - balance of the financial account

= 0.1 trillion - 0.5 trillion

= -0.4 trillion

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