$$\begin{array} { | l | c | }
\hline \text { (1) US Goods Exports } & + \$ 100 \
\hline \text { (2) US Goods Imports } & - 80 \
\hline \text { (3) US Service Exports } & + 40 \
\hline \text { (4) US Service Imports } & - 90 \
\hline \text { (5) Net Investment Income } & + 20 \
\hline \text { (6) Net Transfers } & - 15 \
\hline \text { (7) Foreign Purchases of Assets in the United States } & + 30 \
\hline \text { (8) US Purchases of Foreign Assets Abroad } & - 10 \
\hline \text { (9) Balance on Capital Account } & + 5 \
\hline
\end{array}$$ The table contains hypothetical data for the U.S. balance of payments. All ?gures are in billions of dollars. The U.S. balance on goods and services is a
A) $10 billion de?cit.
B) $20 billion de?cit.
C) $30 billion surplus.
D) $30 billion de?cit.

Question

$$\begin{array} { | l | c | } 
\hline \text { (1) US Goods Exports } & + \$ 100 \
\hline \text { (2) US Goods Imports } & - 80 \
\hline \text { (3) US Service Exports } & + 40 \
\hline \text { (4) US Service Imports } & - 90 \
\hline \text { (5) Net Investment Income } & + 20 \
\hline \text { (6) Net Transfers } & - 15 \
\hline \text { (7) Foreign Purchases of Assets in the United States } & + 30 \
\hline \text { (8) US Purchases of Foreign Assets Abroad } & - 10 \
\hline \text { (9) Balance on Capital Account } & + 5 \
\hline
\end{array}$$ The table contains hypothetical data for the U.S. balance of payments. All ?gures are in billions of dollars. The U.S. balance on goods and services is a
A) $10 billion de?cit.
B) $20 billion de?cit.
C) $30 billion surplus.
D) $30 billion de?cit.

Quizplus · Accepted Answer

To calculate the balance on goods and services, we need to add up exports of goods and services (1 and 3) and subtract imports of goods and services (2 and 4).

(1) +\$100 
(2) -\$80 
(3) +\$40 
(4) -\$90

Adding these up gives us a balance of +\$70 for goods and services.

However, we also need to consider the other components of the balance of payments. Adding up net investment income, net transfers, foreign purchases of assets in the United States, and US purchases of foreign assets abroad, we get:

(5) +\$20 
(6) -\$15 
(7) +\$30 
(8) -\$10

Adding these up gives us a balance of +\$25 on the capital account.

To find the overall balance of payments, we add the balance on goods and services and the balance on the capital account:

\$70 + \$25 = +\$95

This means that the US has a net inflow of $95 billion in this hypothetical scenario, which implies a surplus in the balance of payments. The only option that indicates a surplus is C, which is not correct. The correct answer is D, which shows that there is a \$30 billion deficit in the balance of payments.

The Table Contains Hypothetical Data for the U