-The table above shows the transactions made during 2009 by the citizens of Biscuit, whose currency is the crumb. During 2009, the official reserves increased by 380 million crumbs. Calculate the current account balance.

Question

Quizplus · Accepted Answer

The current account balance is equal to the sum of the trade balance and the net income from abroad. The trade balance is equal to the value of exports minus the value of imports. The net income from abroad is equal to the sum of the net factor income from abroad and the net current transfers from abroad. In this case, the trade balance is equal to 1,000 million crumbs, the net factor income from abroad is equal to 200 million crumbs, and the net current transfers from abroad is equal to 0. Therefore, the current account balance is equal to 1,000 million crumbs + 200 million crumbs + 0 = 1,200 million crumbs. However, the official reserves increased by 380 million crumbs during 2009. This means that the current account balance must have been equal to 1,200 million crumbs - 380 million crumbs = 880 million crumbs.

-The Table Above Shows the Transactions Made During 2009 by the Citizens