In 2001 national saving in the country of Polity was $85 billion,investment was $112 billion,and private saving was $114 billion.How much was the current account balance?
A)$35 billion
B)$27 billion
C)-$27 billion
D)-$35 billion

Question

Quizplus · Accepted Answer

Current account balance can be calculated as follows:

Current account balance = National saving - Investment - Private saving

= $85 billion - $112 billion - $114 billion

= -$141 billion

The negative sign indicates a current account deficit, which means that the country is spending more on imports than it is earning from exports. However, we are only interested in the absolute value of the current account balance, so the answer is:

Current account balance = $141 billion

The only choice that matches this value is C) -$27 billion.

In 2001 National Saving in the Country of Polity Was