Suppose Salvania's exports equal $500 billion and its imports equal $400 billion.
Foreigners purchased $200 billion worth of assets in Salvania. What is Salvania's balance in its current account?
A) $100 billion.
B) -$100 billion.
C) $300 billion.
D) -$300 billion.

Question

Quizplus · Accepted Answer

The current account balance is calculated as exports minus imports. Salvania's exports are $500 billion and imports are $400 billion, resulting in a current account balance of $100 billion ($500 billion - $400 billion).

Suppose Salvania's Exports Equal $500 Billion and Its Imports Equal