Differentiate the current account or the capital account

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Reference no: EM131481650

Question: Sometimes, official government reserves are singled out in the balance of payments accounts. For example, when China buys U.S. financial assets (currency and Treasury securities), this purchase is classified as "Official Government Reserves." On which side of the balance of payments should such purchases be reflected-the current account or the capital account? Explain your logic.

Reference no: EM131481650

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