What do the plus signs and negative signs signify in the U.S. balance-of-payments statement? Which of the following items appear in the current account and which appear in the capital and financial account: U.S. purchases of assets abroad, U.S. services imports, foreign purchases of assets in the United States, U.S. goods exports, U.S. net investment income? Why must the current account and the capital and financial account sum to zero?

Balance of payments is defined as the summation of all the financial tractions taking place between two countries.

The negative sign signifies the flow of money out of the U.S. economy, and the positive sign indicates the flow of funds into the United States. For example, the U.S. exports of goods & services and the U.S. imports of goods & services will be denoted by positive and negative signs, respectively, in the current account of the U.S. balance of payments.

When there is an export, goods or services flow out of the U.S. economy, and money is credited into the U.S. economy. For imports, cash is debited from the United States economy.

Since any deficit or surplus in the current account automatically creates an offsetting entry in the capital and financial account, the current account balance and the capital and financial account balance must always sum to zero.