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1. What has caused the U.S. run a merchandise trade deficit year after year since the early 1980s?

2. Is the current account a deficit problem? Explain.

3. Is the trend of the international investment position of the U.S. problematic? Why or why not?

4. How is the current account related to a country's business cycle?

5. What is the relationship between a country's net financial inflow and its current account?

6. How does the U.S make adjustments for the balance of payment issues?

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What has caused the U.S. run a merchandise trade deficit year after year since the early 1980s?

Solution provided by:
Umut Oltulu, MBA
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  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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