3. Current, financial, and capital accounts Consider the following table showing

ID: 2496499 • Letter: 3

Question

3. Current, financial, and capital accounts Consider the following table showing hypothetical balance-of-payments data for the United States. Choose the correct value for each box Balance of Payments (Billions of $) Current Accounts U.S. merchandise exports U.S. merchandise imports Merchandise trade balance U.S. service exports U.S. service imports Services balance Goods and services balance Net investment income from abroad Net unilateral transfers Current account balance +80 60 +35 5 Capital and Financial Accounts Change in U.S.-owned assets abroad Change in foreign-owned assets in U.S Capital and financial account balance -43 +36 Statistical discrepancy Trade balance 0

Explanation / Answer

Merchandise trade balance= +80-60 = 20

US service imports = US Exports - Services balance = 35+5 = 40

Goods and services balance = 20-5 = 15

Current account balance = 15 -3-2 = 10

Capital and financial account balance = -43+36=-7

Blanks:

1. -, under unilateral transfer

2. According to the table, US is running a trade surplus

3. in excess of/surplus of

4. surplus, capital, zero