Table 20.1
$\begin{array}{|l|c|}
\hline \text { Current Account } & \text { (\$) } \
\hline \text { Merchandise exports } & +1000 \
\hline \text { Merchandise imports } & +3000 \
\hline \text { Merchandise trade balance } & \
\hline \text { Service exports } & +1500 \
\hline \text { Service imports } & +1000 \
\hline \text { Goods and services balance } & \
\hline \text { Net investment income from abroad }&100\
\hline \text { Net unil ateral transfers } &- 1,000 \
\hline \text { Current account balance } & \
\hline
\end{array}$
-Refer to Table 20.1,which shows a balance-of-payments account.What is the current account balance?

Question

Table 20.1
 $\begin{array}{|l|c|}
\hline \text { Current Account } & \text { (\$) } \
\hline \text { Merchandise exports } & +1000 \
\hline \text { Merchandise imports } & +3000 \
\hline \text { Merchandise trade balance } & \
\hline \text { Service exports } & +1500 \
\hline \text { Service imports } & +1000 \
\hline \text { Goods and services balance } & \
\hline \text { Net investment income from abroad }&100\
\hline \text { Net unil ateral transfers } &- 1,000 \
\hline \text { Current account balance } &  \
\hline
\end{array}$
-Refer to Table 20.1,which shows a balance-of-payments account.What is the current account balance?

Quizplus · Accepted Answer

The current account balance is calculated as the sum of the merchandise trade balance, the goods and services balance, net investment income from abroad, and net unilateral transfers. 
Merchandise trade balance = exports - imports = \$1000 - \$3000 = -\$2000 (negative because imports are greater than exports)
Goods and services balance = merchandise trade balance + service exports - service imports 
= -\$2000 +\$1500 -\$1000 = -\$2500 
Current account balance = goods and services balance + net investment income from abroad + net unilateral transfers 
= -\$2500 + \$100 - \$1000 = -\$2400
Therefore, the current account balance is -\$2400 or option C.

Table 201 -Refer to Table 20