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1) Suppose a nation has a deficit on capital account. What does this mean? What can you conclude about its balance on current account? 2) Suppose a nation has a surplus on capital account. What does this mean? What can you conclude about its balance on current account? 3) The text says that the U.S. capital account surplus necessarily implies a current account deficit. Suppose that the United States were to undertake measures to eliminate its capital account surplus. What sorts of measures might it take? Do you think such measures would be a good idea? Why or why not?

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1) Suppose a nation has a deficit on capital account. What does this mean? What can you conclude about its balance

on current account?

2) Suppose a nation has a surplus on capital account. What does this mean? What can you conclude about its balance on current account?

3) The text says that the U.S. capital account surplus necessarily implies a current account deficit. Suppose that the United States were to undertake measures to eliminate its capital account surplus. What sorts of measures might it take? Do you think such measures would be a good idea? Why or why not?

 
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