AP MacroeconomicsInternational Trade & Finance
Capital and Financial Account
The capital and financial account records international purchases and sales of assets such as stocks, bonds, and real estate.
Inflows of foreign investment create a surplus that offsets a current account deficit. It captures borrowing, lending, and foreign direct investment. With the current account, it makes up the balance of payments.
Formula / Example
Roughly offsets the current account balance.
Interactive graph
Exchange Rates →
Drag the curves and see it for yourself.
Study module
Exchange Rates →
Full lesson, practice questions, and flashcards.