Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 5, Problem 1NP
To determine
Net Exports, current account balance, financial account balance, balance of payments
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Students have asked these similar questions
The table below gives the data about Etruria's balance of payments. (All figures are in billions of dollars.)
Foreign investment in Etruria
82
Secondary (transfers) income received from abroad
13
Primary (investment) income received from abroad
9
Imports of goods and services
148
Exports of goods and services
152
Secondary (transfers) income paid abroad
8
Etruria investment abroad
64
Primary (investment) income paid abroad
25
a. What is the value of the balance of trade?
$
b. What is the balance on the current account? Remember to enter a minus (−) sign to indicate negative values.
c. What is the balance on the capital account?
d. Is there a balance of payments surplus or deficit? How much?
Here are some balance of payments data (without pluses and minuses):
Category
Exports of goods
Imports of goods
Service exports
Service imports
Income receipts from abroad
Income payments to foreigners
Increase in home country's ownership of assets abroad
Increase in foreign ownership of assets in home country
Increase in home reserve assets
Increase in foreign reserve assets
Assuming that unilateral transfers equal zero, find each of the following.
Net exports (NX) = - 15
Current account balance (CA) = - 55
Financial account balance (KFA) :
=
Value
120
155
110
90
110
150
160
190
35
40
(Note: there is a statistical discrepancy, so do not use the current-account balance to determine the financial account balance. Also, the increase in home reserve assets is included in the
increase in the home country's ownership of assets abroad, and the increase in foreign reserve assets is included in the increase in foreign ownership of assets in the home country.)
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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