Suppose Boulinas' exports equal $50 billion, its purchases of foreign assets equal $100 Jbillion, and foreign purchase of Boulinas' assets equal $200 billion. What is Boulinas'
Jbalance on its current account?

Question

Quizplus · Accepted Answer

Boulinas' current account balance can be calculated as the difference between exports and purchases of foreign assets, which equals -$50 billion. Since foreign purchase of Boulinas' assets is counted as a negative in the current account balance calculation, it is subtracted from the -$50 billion, resulting in a current account balance of -$150 billion. However, since the question asks for the absolute value of the current account balance, the answer is $100 billion (which is equal to the absolute value of -$150 billion). Therefore, choice B is the best choice.

Suppose Boulinas' Exports Equal $50 Billion, Its Purchases of Foreign