Complete the following table by selecting the correct value for each missing ent
ID: 1210360 • Letter: C
Question
Complete the following table by selecting the correct value for each missing entry. Suppose an Argentine citizen gives money to his brother in the United States. This would be entered as a item under the section of the U.S. current account. According to the table, the United States is running a trade in goods and services. The current account balance suggests that U.S. current account transactions (exports and imports of goods and services and inflows and outflows of investment income and transfers) created outpayments of foreign currencies from the United States that were the inpayments of foreign currencies to the United States. Any surplus or deficit in one account must be offset by deficits or surpluses in other balance-of-payments accounts. Because the current account is in, the excess of foreign currency held by Americans must either be loaned to foreigners or used to buy foreign stocks or bonds. All of these transactions are then recorded in the account. Since any imbalance in one account automatically leads to an equal, but opposite, imbalance in the other, the balance of payments is always .Explanation / Answer
1. Merchandise trade balance = $3
trade balance = exports - imports => 70 - 67 = $3.
2. $35.
import services = export services - trade balance.
3. Current a/c balance = $28.
Current a/c = merchandise trade balance + services balance + investment balance + unilateral transfers.
current a/c = 3 + 35 - 2 - 8 = $28.
4. financial balance = $2.
Financial balance = foreign own assets in US (inflow of money) - US owned assets abroad (outflow of money) = 42 - 40 =$2.
Net balance = current account + financial account - statistical discrepancy.
Net balance = 28 + 2 -30 = $0.