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Answer the Questions Below Based Upon the Following Balance of Payments

Question 36

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Answer the questions below based upon the following Balance of Payments table for Tundraland (figures are in millions of cugats):
 Current account  Merchandise  Exports +375 Imports 210 Balance of trade +165 Services  Exports +20 Imports 10 Balance on services +10 Balance of goods and services +175 Net investment income +7 Net transfers 15 Investment Trans. Balance 8 Balance on current account +167 Capital Account  Capital inflows +125 Capital outflows 250 Balance on capital account 125 Current and capital balance +42 Statistical discrepancy 2 Official transactions account +40 Totals 0\begin{array}{|l|r|}\hline \text { Current account } & \\\hline \text { Merchandise } & \\\hline \text { Exports } & +375 \\\hline \text { Imports } & -210 \\\hline \text { Balance of trade } & +165 \\\hline \text { Services } & \\\hline \text { Exports } & +20 \\\hline \text { Imports } & -10 \\\hline \text { Balance on services } & +10 \\\hline \text { Balance of goods and services } & +175 \\\hline \text { Net investment income } & +7 \\\hline \text { Net transfers } & -15 \\\hline \text { Investment Trans. Balance } & -8 \\\hline \text { Balance on current account } & +167 \\\hline \text { Capital Account } & \\\hline \text { Capital inflows } & +125 \\\hline \text { Capital outflows } & -250 \\\hline \text { Balance on capital account } & -125 \\\hline \text { Current and capital balance } & +42 \\\hline \text { Statistical discrepancy } & -2 \\\hline \text { Official transactions account } & +40 \\\hline \text { Totals } & 0\\\hline\end{array} (a)What is the balance on the current account? Did more cugats flow in or out of that account?
(b)What is the balance on the capital account? Did more cugats flow in or out of that account?
(c)Did Tundraland buy or sell its currency? How do you know? Is Tundraland trying to lower or raise the value of its currency? Show graphically.

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(a)The balance on the current account is...

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