(3 points) Over the past quarter century, the United States has run larger and larger current account deficits. Which of the following are potential explanations: (a) US private savings have been increasing more than public savings (b) US total savings have been shrinking (c) Interest payments on US foreign liabilities have been smaller than interest received on US foreign assets (d) Investment have been increasing less than total savings (e) both (b) and (c) 3 7. (3 points) From 2002 to 2007, the U.S. cumulative CA deficit was 3.9 trillion (32% of GDP). However, the external wealth improved by 80 billion. Which of the following are potential explanations for these two phenomena? (a) Large trade balance deficits (b) Positive valuation effects driven by an outperformance of foreign stock markets compared to the US stock market. (c) Negative valuation effects driven by an outperformance of foreign stock markets compared to the US stock market. (d) Positive valuation effects driven by an underperformance of foreign stock markets compared to the US stock market. (e) Negative valuation effects driven by an underperformance of foreign stock markets compared to the US stock market. 8. (3 points) The United States is a multi-trillion dollar net debtor (i.e., its external wealth is negative). The United States has also had positive net factor income from abroad for many years. A possible explanation for these patterns are (a) a higher rate of return on US assets compared to foreign as