Question

The following table shows a hypothetical balance-of-payments statement for the United States. All figures are in billions of dollars.

Complete the table by filling in the missing cells.

Balance of Payments (Billions of U.S. dollars)
Current Account
Goods and Services Exports	200
Goods and Services Imports	-182
Trade Balance
Income (net)		-10
Current Account Balance
Capital Account
U.S. Capital Inflow	80
U.S. Capital Outflow	-60
Capital Account Balance
Statistical Discrepancy

According to the table, the United States is running a trade __________(deficit,surplus) .

The balance of payments equals______ billion.

Answer 1

The balance of trade of a country is always zero. It comprises of sum of current account, capital account and financial account. So, if value of current account is negative then it means that there will be positive balance in capital account plus financial account of equal magnitude Current account depicts all the net transfer payments, net income or factor income that take place in a given period of time. Current account adjoin together different source of payments into or out of the country Calculate the trade balance as follows: Trade balance -Exports - Imports -200-182 18 Thus, the trade balance is 18 Calculate the current account balance as follows Current account balance-Trade balance + Income(net 18-10 Thus, the current account balance is 8 Calculate the capital account balance as follows

Capital account balance -Capital inflow + Capital outflow -80-(-60) -80- 60 -201 Thus, the capital account balance is 20 Calculate the statistical discrepancy as follows: Statistical discrepancy -Capital account balance - Current account balance 20-8 1-28 Thus, the statistical discrepancy is-28 According to the table, the United States is running a trade surplus. Calculate the balance of payments as follows: Balance of payment- Current account balance + Capital account balance + Statistical discrepancy -8+20-28 0 us, The balance of payments equals