Answer the next five questions on the basis of the following hypothetical data for a hypothetical nation Economia.All numbers are in billions of dollars.Assume that there is no Statistical Discrepancy. (a) What is the balance of trade? (b) What is the balance on goods and services? (c) What is the balance on the current account? (d) What is the balance on the capital account? (e) What official reserves will be needed to settle the balance of payment accounts?

Question

Answer the next five questions on the basis of the following hypothetical data for a hypothetical nation Economia.All numbers are in billions of dollars.Assume that there is no Statistical Discrepancy.  (a) What is the balance of trade? (b) What is the balance on goods and services? (c) What is the balance on the current account? (d) What is the balance on the capital account? (e) What official reserves will be needed to settle the balance of payment accounts?

Quizplus · Accepted Answer

The Answer is (a) Goods exports are +$90 billion and goods imports are -$79 billion, so the balance of trade is +$11 billion.(b) Goods and service exports are $100 billion ($90 + $10).Goods and service imports are $107 billion ($79 + $28).The balance on goods and services is -$7 billion ($100 - $107).(c) The balance on goods and services (-$7 billion) plus net investment income (-$15 billion) plus net transfers (+$17 billion) equals the current account balance.Therefore, the current account balance is -$5 billion.(d) The capital account balance is +$1 billion ($48 - $47).(e) The current account balance is -$5 billion and the capital account balance is +$1 billion.There is a balance of payments deficit of -$4 billion.Therefore, $4 billion in official reserves will be needed to settle the net difference.

Answer the Next Five Questions on the Basis of the Following