--%>

Current and capital account deficit

 Exhibit 3.3 states that in year 1991, the U.S. had current account deficit and consecutively a capital account deficit. Explain about how this may occur?

E

Expert

Verified

In year 1991, U.S. has experienced an overall BOP deficit that should have been accommodated by Federal Reserve’s official reserve action which means decreasing down its reserve holdings.

   Related Questions in Financial Accounting

  • Q : Link financial accounting and

    is there a link between financial accounting and programmed decision

  • Q : International portfolio for buying

    Why it is easier for an investor willing to diversify his portfolio internationally for buying depository receipts instead of actual shares of the company?

  • Q : Challenges of friendships How is

    How is friendship differing from other relationships? Explain the challenges of friendships. What are the common expectations for friendships – give an illustration of each. Explain how friendships fluctuate ove

  • Q : Investment approach of Lynch Investment

    Investment approach of Lynch: Peter Lynch, the best known mutual fund manager, also adopts the words of Benjamin Graham in the sense that he looks at companies not from the perspective of how the stock prices move

  • Q : Eliminating exposure of the currency

    Banks find it essential in order to accommodate their client’s requirements for buying or selling foreign exchange forward, in several instances for the hedging purposes.  How the bank can eliminate the exposure of the currency it has made for itself by acc

  • Q : Define Financial Accounting Give a

    Give a brief introduction of the term ‘Financial Accounting’. And also write down its elements?

  • Q : Stigmatizing obesity Should obesity be

    Should obesity be stigmatized? Answer yes or no, summarize the discussion and explain your position.

  • Q : Elder Abuse Explain the term Elder

    Explain the term Elder Abuse in brief ?

  • Q : Currency trading at discount or at

    What is currency trading at discount or at premium in forward market?

  • Q : Book-value method of accounting for

    The stock is recorded at the book value of debt. The convertible debt is removed at the book value, the number of share times par is added to the stock account, and the remaining amount is plugged in to additional paid in capital. Contrast with the market value in whi