The table gives some information about U.S. international transactions in 2008.

Question

The table gives some information about U.S. international transactions in 2008. Sub This Question: 4 pts 1 of 6 (3 complete) This Quiz: 10 pts The table gives some information about U.S. international transactions in 2008. Billions Item Imports of goods and services Foreign investment in the United States Exports of goods and services U.S investment abroad Net interest income Net transfers Statistical discrepancy of dollars >>> If your answer is negative, include a minus sign. If your answer is positive, do not 2,561 955 1,853 300 include a plus sign. The current account balance is billion dollars. The capital and financial account balance is billion dollars. The official settlements account balance is billion dollars. U.S. official reserves are 121 -123 Enter your answer in each of the answer boxes

Explanation / Answer

a) current account balance = (exports - imports) + net interest income + net transfers
= (1853 - 2561 ) + 121 - 123
= -710 billion dollars

b) capital and financial account balance = Foreign investment in domestic country - domestic country's investment n foreign + statistical discrepancy
= 955 - 300 + 66 = $721 billion dollars is the capital and financial account balance.

c) Official settlement account balance = current account balance + capital and financial account balance
= -710 + 721
= -11 billion dollars

d) U.S. official reserves are net borrower because their capital and financial account balance is positive.

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