Refer to the table at right. The current account balance is Exports of goods Net unilateral transfers $1,000 - 15 O A. $170. Imports of services Official transactions - 590 B. - $45. 60 Capital coming into U.S. Imports of goods Exports of services U.S. capital going abroad 400 O C. $155. - 665 O D. $140. 410 - 600
Refer to the table at right. The current account balance is Exports of goods Net unilateral transfers $1,000 - 15 O A. $170. Imports of services Official transactions - 590 B. - $45. 60 Capital coming into U.S. Imports of goods Exports of services U.S. capital going abroad 400 O C. $155. - 665 O D. $140. 410 - 600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**Current Account Balance Calculation**
To understand the current account balance, we must consider the values listed in the table. The current account balance is a measure of a country's international trade, net income from abroad, and net current transfers.
### Table Breakdown:
1. **Exports of goods**: $1,000
2. **Net unilateral transfers**: -$15
3. **Imports of services**: -$590
4. **Official transactions**: $60
5. **Capital coming into U.S.**: $400
6. **Imports of goods**: -$665
7. **Exports of services**: $410
8. **U.S. capital going abroad**: -$600
### Calculating the Current Account Balance:
The formula to calculate the current account balance is:
\[ \text{Current Account Balance} = (\text{Exports of goods} + \text{Exports of services} + \text{Net unilateral transfers}) - (\text{Imports of goods} + \text{Imports of services}) \]
Substituting the given values:
\[ \text{Current Account Balance} = (1000 + 410 - 15) - (665 + 590) \]
\[ \text{Current Account Balance} = 1395 - 1255 \]
\[ \text{Current Account Balance} = 140 \]
Based on the options given, the correct answer is:
- **D. $140.**
**Explanation:**
This calculation involves summing up the exports and subtracting the imports, while taking unilateral transfers into account. These numbers give a snapshot of the country's total transactions with the rest of the world, reflecting whether it is a net lender or borrower internationally.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F518d5b01-a081-4158-af5e-3484c0c31611%2Fc0d7e87a-35e6-4ee9-a3fe-e9c9d87b4911%2Ffzlbkmr_processed.png&w=3840&q=75)
Transcribed Image Text:**Current Account Balance Calculation**
To understand the current account balance, we must consider the values listed in the table. The current account balance is a measure of a country's international trade, net income from abroad, and net current transfers.
### Table Breakdown:
1. **Exports of goods**: $1,000
2. **Net unilateral transfers**: -$15
3. **Imports of services**: -$590
4. **Official transactions**: $60
5. **Capital coming into U.S.**: $400
6. **Imports of goods**: -$665
7. **Exports of services**: $410
8. **U.S. capital going abroad**: -$600
### Calculating the Current Account Balance:
The formula to calculate the current account balance is:
\[ \text{Current Account Balance} = (\text{Exports of goods} + \text{Exports of services} + \text{Net unilateral transfers}) - (\text{Imports of goods} + \text{Imports of services}) \]
Substituting the given values:
\[ \text{Current Account Balance} = (1000 + 410 - 15) - (665 + 590) \]
\[ \text{Current Account Balance} = 1395 - 1255 \]
\[ \text{Current Account Balance} = 140 \]
Based on the options given, the correct answer is:
- **D. $140.**
**Explanation:**
This calculation involves summing up the exports and subtracting the imports, while taking unilateral transfers into account. These numbers give a snapshot of the country's total transactions with the rest of the world, reflecting whether it is a net lender or borrower internationally.
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