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 the value of
Townsends' assets purchased by foreigners?

Question

Quizplus · Accepted Answer

Since exports minus imports equals purchases of foreign assets minus foreign purchases of domestic assets, we can use this formula to find the value of Townsend's assets purchased by foreigners:

Exports - Imports = Purchases of Foreign Assets - Foreign Purchases of Domestic Assets

$1,000 billion - $950 billion = $900 billion - Foreign Purchases of Domestic Assets

Simplifying the equation:

$50 billion = $900 billion - Foreign Purchases of Domestic Assets

$50 billion + Foreign Purchases of Domestic Assets = $900 billion

Foreign Purchases of Domestic Assets = $850 billion

Therefore, the value of Townsend's assets purchased by foreigners is $850 billion.

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