Table 42.2 Equilibrium in the Foreign Exchange Market: A Hypothetical Example

European purchases of U.S. dollars (trillions of U.S. dollars)To buy U.S. goods and services: 1.0To buy U.S. assets: 1.0Total purchases of U.S. dollars: 2.0
U.S. sales of U.S. dollars (trillions of U.S. dollars)To buy European goods and services: 1.5To buy European assets: 0.5Total sales of U.S. dollars: 2.0
U.S. balance of payments on the current account: −0.5U.S. balance of payments on the financial account: +0.5