The current account is affected by how much United States citizens spend and what they earn (Congressional Budget Office, 2004). When the income is greater than spending, then the excess produced goods are purchased by foreign countries, resulting that the United States current account balance is positive or surplus (Congressional Budget Office, 2004)...
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When the spending of the United States citizens exceeds what they earn, the difference of goods was purchased from foreign markets, resulting in a current balance deficit (Congressional Budget Office, 2004). A country's net financial inflow or income and the current account are directly related to one another...
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