Table :

TABLE 19-4 A Hypothetical Equilibrium in the Foreign Exchange Market

European purchases of U.S. dollars (trillions of U.S. dollars)

To buy U.S. goods and services: 1.0

To buy U.S. assets: 1.0

Total 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: 1.5

To buy European assets: 0.5

Total sales of U.S. dollars: 2.0

 

U.S. balance of payments on current account: –0.5

U.S. balance of payments on financial account: +0.5