Question

8) What is U.S. financial account surplus/deficit and how it differs from U.S. current account surplus/deficit?

16) Under what conditions could a country have a sizable deficit in its trade balance and still have an appreciating currency?

Answer 1

8) A financial account surplus means that buyers in the rest of the world are purchasing more of a country's assets than buyers in the domestic economy arespending on rest-of-world assets .

A country is said to have a trade surplus if its exports exceed its imports, and a trade deficit if its imports exceed its exports. Positive net sales abroad generally contribute to a current account surplus; negative net sales abroad generally contribute to a current account deficit.

The trade current account is the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers. Financial account is a component of a country's balance of payments that covers claims on or liabilities to non-residents, specifically in regard to financial assets.