(Table) For the balance of payments to be in balance, the: $$\begin{array}{l}
\text { Balance of Payments (billions of U.S. dollars) }\
\begin{array} { l c }
\hline \text { Component } & \text { Amount } \
\text { Exports } & \$ 1,800 \
\text { Imports } & 2,300 \
\text { Income received } & 490 \
\text { Income payments } & 540 \
\text { Net transfers } & - 100 \
\text { Increase in foreign-owned } & \
\text { assets in the United States } & 700 \
\text { Increase in U.S.-owned } & \
\text { assets abroad } &100
\end{array}
\end{array}$$

Question

(Table) For the balance of payments to be in balance, the: $$\begin{array}{l}
\text { Balance of Payments (billions of U.S. dollars) }\
\begin{array} { l c } 
\hline \text { Component } & \text { Amount } \
\text { Exports } & \$ 1,800 \
\text { Imports } & 2,300 \
\text { Income received } & 490 \
\text { Income payments } & 540 \
\text { Net transfers } & - 100 \
\text { Increase in foreign-owned } & \
\text { assets in the United States } & 700 \
\text { Increase in U.S.-owned } & \
\text { assets abroad } &100  
\end{array}
\end{array}$$

Quizplus · Accepted Answer

The balance of payments is the sum of the current account, capital account, and statistical discrepancy. The current account balance is calculated as exports ($1,800) - imports ($2,300) + income received ($490) - income payments ($540) + net transfers (-$100) = -$650 billion. The capital account balance is the increase in foreign-owned assets in the U.S. ($700) - increase in U.S.-owned assets abroad ($100) = $600 billion. To balance the payments, the statistical discrepancy must be $50 billion to offset the difference.

(Table) for the Balance of Payments to Be in Balance