If the exports are $1.5 trillion, imports are $2 trillion, short-term investment to and from the US exactly balances, and taxes and private payments to and from the US also exactly balance, the current account balance is a

Question

Quizplus · Accepted Answer

To calculate the current account balance, we need to add up the balance of trade (exports minus imports), net income from abroad (income received from foreign investments minus payments made to foreign investors), and net transfer payments (aid and other unrequited payments received minus payments made).

Given the information in the question, the balance of trade is -$0.5 trillion (imports greater than exports), and there is no information provided about net income from abroad or net transfer payments.

Therefore, the current account balance is a deficit of $0.5 trillion.

If the Exports Are $1