Consider this table, which shows hypothetical balance-of-payments data for the United States. Select the correct value for each of the boxes. Simplified Balance of Payments (Billions of Dollars) Account Net Balance Merchandise Services Income Unilateral Transfers Current Account Financial Account Statistical Discrepancy Trade Balance -5 -2 +10 -3 an American business owner purchases chocolates from Belgium in order to sell them in her shops. This would be entered as a the section of the U.S. current account. The net value of the merchandise and services accounts combined gives the value of I + G + X. If you rewrite the equation as X = GDP - (C+1+G), you can see that the current_ item under within the national income accounting equation GDP = C + U.S. value of X implies that This means that the United States is producing than it is consuming, making it a 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
Consider this table, which shows hypothetical balance-of-payments data for the United States. Select the correct value for each of the boxes. Simplified Balance of Payments (Billions of Dollars) Account Net Balance Merchandise Services Income Unilateral Transfers Current Account Financial Account Statistical Discrepancy Trade Balance -5 -2 +10 -3 an American business owner purchases chocolates from Belgium in order to sell them in her shops. This would be entered as a the section of the U.S. current account. The net value of the merchandise and services accounts combined gives the value of I + G + X. If you rewrite the equation as X = GDP - (C+1+G), you can see that the current_ item under within the national income accounting equation GDP = C + U.S. value of X implies that This means that the United States is producing than it is consuming, making it a 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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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