Looking at the U.S. balance of payments for the last two decades, ...

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Looking at the U.S. balance of payments for the last two decades, how have the current account and the capital account changed?
 
  What will be an ideal response?

Question 2

The table below shows data (in millions) for Sun Trust Banks in September 2007 and September 2008.
 
  2007 2008
  Loans 83 78
  Reserves 4 5
  Deposits 114 95
 
  The data show that Sun Trust
  A) increased its reserve ratio to 5.3 percent over the 12 months.
  B) increased its reserve ratio to 6.4 percent over the 12 months.
  C) has fewer excess reserves in 2008.
  D) faced a higher currency drain ratio in 2008.

[janeli1]

Answer to Question 1

Since the early 1980s and onward, the U.S. current account has been negative and sometimes quite large. The U.S. capital account has more or less mirrored the current account, only it has been positive rather than negative. Thus when the current account deficit is small, the capital account surplus is small and when the current account deficit is large, the capital account surplus is large.

Answer to Question 2

A

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Thank you

[janeli1]

Happy to help you