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

Question

Quizplus · Accepted Answer

Boulinas' current account balance is equal to its exports minus its imports plus its net foreign asset purchases. In this case, Boulinas' exports are $50 billion, its imports are $200 billion, and its net foreign asset purchases are -$100 billion (since it purchased $100 billion of foreign assets and sold $200 billion of its own assets). Therefore, Boulinas' current account balance is $50 billion - $200 billion + (-$100 billion) = -$150 billion.

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