The United States has become a net debtor nation where the rest of the world own

Question

The United States has become a net debtor nation where the rest of the world owns more assets in the United States than the United States owns assets in the rest of the world. The United States external debt is directly caused by: (a) years of households borrowing more and more to buy expensive homes. (b) years of large U.S. Federal government budget deficits. (c) the low value of the U.S. dollar, which makes it cheap for the Rest of the World to buy U.S. assets and expensive for Americans to buy assets in the Rest of the World. (d) years of large U.S. current account deficits

Explanation / Answer

(d) years of large U.S. current account deficits

AS Debt is the sum of current account deficits.

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