During some year a country had exports of $50 billion,imports of $35 billion,and purchased $30 billion of foreign assets.What was the value of domestic assests purchased by foreigners?
A) $35 billion
B) $20 billion
C) $15 billion
D) $5 billion

Question

Quizplus · Accepted Answer

The balance of payments identity states that Current Account = Capital Account, which means Exports - Imports = Domestic Asset Purchases - Foreign Asset Purchases. Using the given values, we can find that Domestic Asset Purchases - $30 billion = $50 billion - $35 billion (Exports - Imports). Therefore, Domestic Asset Purchases = $15 billion.

During Some Year a Country Had Exports of $50 Billion,imports