19 thoughts on “The relationship between the Current Account Balance and Exchange Rates

  1. At 12:40 you mention the flow of dollars from china to the USA.
    However, the entire point of this process is for china to demand US dollars to keep the dollar strong, not supply dollars.this is why the central bank prints tons of RNB.
    This seems confusing

  2. A country that runes a trade surplus this year
    a)has a positive net financial inflow this year
    b)is in effect borrowing from the rest of the world this year
    c)has bought more foreign assets this year than foreigner have bought its asset
    d) has zero net financial outflow this year
    Correct Ans is c but why?? My answer was A

  3. explain more details financial accounts and current account or exchange rate what is relationship?

  4. Great video, exceptionally well explained. It would be interesting to extend this by considering what are the disadvantages and advantages for the Chinese economy when they manage their exchange rate by buying US debt.

  5. Thank you for this great explanation! I should've paid more attention in economics class.

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