Analyze the following statements regarding the US external position: a. The deterioration of the Net Foreigner Asset...

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Economics

Analyze the following statements regarding the US externalposition:
a. The deterioration of the Net Foreigner Asset position meansthat foreign holdings of US issued assets have increased whiledomestic holdings of foreign issued assets have not increased.
b. The increase in the fiscal deficit in the last decadescontributed to the current account deficits.
c. Investments in the US have been larger than domestic Savingswhich is equivalent to incurring a fiscal deficit.
Explain which statement is correct (and why) and why the othersare incorrect.

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a Net foreigner asset refers to the value of the US assets owned by foreigners minus the value of the foreignassets owned by the US A deterioration in the net foreign assets would mean that the US assets owned by foreigners has decreased while the See Answer

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