Question

Transactions between the US and the rest of the world are shown below. Use the following information to answer the next 2 questions.

1. US citizens spend 50 million dollars visiting China.
2. American companies sell 30 million dollars’ worth of stock to foreign investors.
3. US citizens receive 10 million dollars’ worth of dividend payments from foreign corporations.
4. US government buys 5 million dollars’ worth of bonds.
5. American citizens purchase 35 million dollars’ worth of Japanese produced vehicles.
6. US government buys 18 million dollars’ worth of gold.
7. Ford sells 80 million dollars’ worth of cars overseas.
8. US corporations receive 4 million dollars in interest from foreign corporations.
9. US citizens send 16 million dollars in disaster relief to Haiti..

Find the capital account balance (in millions of dollars).

• 25
• 21
• 3
• 5

Find the current account balance (in millions of dollars).

• 18
• -7
• 9
• -5

Answer 1

Current Account Balance

Particulars	Amount in million $
US citizens receive 10 million dollars’ worth of dividend payments from foreign corporations.	10.00
Ford sells 80 million dollars’ worth of cars overseas.	80.00
US corporations receive 4 million dollars in interest from foreign corporations	4.00
Less :
US citizens spend 50 million dollars visiting China.	50.00
American citizens purchase 35 million dollars’ worth of Japanese produced vehicles.	35.00
US citizens send 16 million dollars in disaster relief to Haiti.	16.00
Current Account Balance	-7

Capital Account Balance

Particulars	Amount in million $
American companies sell 30 million dollars’ worth of stock to foreign investors.	30.00
Less :
US government buys 5 million dollars’ worth of bonds.	5.00
Capital Account Balance	25