Suppose Townsend's exports equal $1,000 billion, its imports equal $950 billion, and
Purchases of foreign assets by its citizens equals $900 billion. What is Townsend's balance on its current account?

Question

Quizplus · Accepted Answer

Townsend's current account balance is equal to its exports minus its imports. In this case, Townsend's exports are $1,000 billion and its imports are $950 billion, so its current account balance is $1,000 billion - $950 billion = $50 billion.

Suppose Townsend's Exports Equal $1,000 Billion, Its Imports Equal $950