For the past year, a country has 200 million of exports of goods and services, 160 million of imports of goods and services, 60 million of income received from foreigners, and − 40 million of net unilateral transfers. What is the range of values for income paid to foreigners, so that each of the following would be true? a. The country has a current account surplus. b. The country has a deficit for its goods and services balance. c. The country is a net borrower from the rest of the world.
For the past year, a country has 200 million of exports of goods and services, 160 million of imports of goods and services, 60 million of income received from foreigners, and − 40 million of net unilateral transfers. What is the range of values for income paid to foreigners, so that each of the following would be true? a. The country has a current account surplus. b. The country has a deficit for its goods and services balance. c. The country is a net borrower from the rest of the world.
Chapter4: The Aggregate Economy
Section: Chapter Questions
Problem 5E
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For the past year, a country has 200 million of exports of goods and services, 160 million of imports of goods and services, 60 million of income received
from foreigners, and − 40 million of net unilateral transfers. What is the range of values for income paid to foreigners, so that each of the following
would be true?
a. The country has a current account surplus.
b. The country has a deficit for its goods and services balance.
c. The country is a net borrower from the rest of the world.
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Step 1: State the information given
VIEWStep 2: a. Determine income paid to foreigners to make current account surplus
VIEWStep 3: b. Determine income paid for the economy to have budget deficit
VIEWStep 4: c. Determine income paid so that country is a net borrower to the whole world
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