Question

The current account for a fictitious country is shown in the table below. The balance on the capital and financial account for this country is $88 billion a. Fill in the missing values in the table. Instructions: Enter your answers as whole numbers. Use a negative sign if necessary CURRENT ACCOUNT (in billions of dollars) (1) Goods exports 854 (2) Goods Imports (3) Balance on goods (4) Exports of services (5) Imports of services (6) Balance on services (7) Balance on goods and services (8) Net investment income (9) Net transfers (10) Balance on current account 45 -109 -12 20 b. The country has a current account Click to select < Prev 5 of 13 Next > MacBook Air ** 80 888 3 FS Du SB DO 59 @ 2 # 3 $ 4 % 5 6 7 8 0 W E R T Y с 0

Answer 1

Balance on Goods = Goods Export - Goods Import

1. Goods Export: $854 billion

2. Goods Import: $899 billion

3. Balance on Goods: $854 - $899 = $-45 billion

Balance on current account = Balance on goods and services + Net investment income + Net transfers

88 = BOGS -12 + 20

BOGS = 80

BOS = 80 - 45 = 35

Export of Service - 109 = 35

Export of Service = 144

4. Export of Services: $144 billion

5. Import of Services: -$109 billion

6. Balance on services: ($144 - $109) billion = $35 billion

7. Balance on Goods and Services: = $80 billion.

8. Net Investment income: -$12 billion

9. Net Transfer: $20 billion

10. Balance on current account = $88 billion.

Therefore we get a current account surplus by $88 billion.