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

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 United States' balance of capital and ?nancial account is a

Quizplus · Accepted Answer

The balance of capital account is equal to the sum of Foreign Purchases of Assets in the United States ($30 billion) and US Purchases of Foreign Assets Abroad (-$10 billion), which gives a balance of $20 billion. The balance of financial account is equal to the sum of Net Investment Income ($20 billion), Net Transfers (-$15 billion), and the balance of capital account ($20 billion), which gives a total balance of $25 billion. Since the balance of financial account is equal and opposite to the balance of current account (the sum of exports and imports of goods and services, and net unilateral transfers), which in this case is $(100-80+40-90)+(-15) = -5$, the balance of payments is in surplus of $25 billion ($25 billion worth of financial inflows more than the current account deficit).

The Table Contains Hypothetical Data for the U