2. The below values are obtained from the 2018 U.S. Balance of Payments (in $ millions):...

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Question

2. The below values are obtained from the 2018 U.S. Balance of Payments (in $ millions): • Exports of goods and services: $2,

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Answer 1

Answer #1

Given

2018 BoP statement of the USA

Exports of goods and services: $2,212,079

Imports of goods and services: $2,712,639

Answer:

A)

Current account balance = Exports – Imports, 2,212,079-2,712,639 = -$500,560

B)

The country is having a current account deficit of $500,560, since imports are higher than exports

C)

A deficit in current is usually financed through a surplus in Capital Account. As a result, the capital account will have a surplus

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Answer 2

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