Question

Balance of Payments (Billions of s) Current Accounts Canadian merchandise exports Canadian merchandise imports Merchandise trade balance Canadian service exports Canadian service imports Services balance Goods and services balance Net investment income from abroad Net unilateral transfers Current account balance +65 -96 +55 +10 Financial Accounts Change in Canadian-owned assets abroad Change in foreign-owned assets in Canadian Financial account balance -16 +45 Statistical discrepancy Trade balance 0 Suppose a Canadian citizen gives money to her nephew in Belgium. This would be entered asa under the tem section of the Canadian current account According to the table, Canada is running a trade The current account balance suggests that Canadian current account transactions (exports and imports of goods and services, as well as inflow and outflow of investment income and transfers) created outpayments of foreign currencies from Canada that were the inpayments of foreign currencies to Canada Any surplus or deficit in one account must be offset by deficits or surpluses in other balance-of-payments accounts. Because the current account is in loaned to Canadians or used to buy Canadian stocks or bonds. All of these transactions are then recorded in the , the excess of Canadian currency held by foreigners must either be account. Since any imbalance in one account automatically leads to an equal, but opposite, imbalance in the other, the balance of payments is always

Answer 1

ANSWER:-

=> Merchandise Trade Balance = Exports-Import

= 65-96

= ^_ 31

=> Canadian Service Imports =Canadian service Export - Service Balance

= 55 - (-2)

= ^_ 57 (Negative sign shows wealth is flowing out of the country (as it is import))

=> Goods and Services Balance = Merchandise Balance + Service Balance

= - 31 + 10

= ^_ 21

=> Current Account Balance = -21 -2 -2

= -25

=> Financial Account Balance = -16 + 45

= 29

=>

1. Debit,

2. Net Unilateral Transfers

3.   surplus

4. > ( Less than)

5. surplus

6.   Financial

7. Zero

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