Answer the next question(s) on the basis of the following 2004 balance of payments data (+ and -) for the hypothetical nation of Zabella. All figures are in billions of dollars. Current Account 1) Goods exports+$802) Goods imports-$703) Exports of services+$204) Imports of services-$255) Net investment income+$56) Net transfers-$5Capital Account 7) Foreign purchases of assets in Zabella+$138) Zabella purchases of assets abroad-$23Official Reserves Account 9) Official reserves+$5 Zabella has a balance of trade (goods): deficit of $10 billion surplus of $5 billion surplus of $10 billion deficit of $5 billion

Balance of trade is the difference between the value of Exports and Value of Imports also Balance of…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer the next question(s) on the basis of the following 2004 balance of payments data (+ and -) for the hypothetical nation of Zabella. All figures are in billions of dollars.

Current Account
1) Goods exports	+$80
2) Goods imports	-$70
3) Exports of services	+$20
4) Imports of services	-$25
5) Net investment income	+$5
6) Net transfers	-$5
Capital Account
7) Foreign purchases of assets in Zabella	+$13
8) Zabella purchases of assets abroad	-$23
Official Reserves Account
9) Official reserves	+$5

Zabella has a balance of trade (goods):

deficit of $10 billion

surplus of $5 billion

surplus of $10 billion

deficit of $5 billion

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

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