The following balance of payments data is for the economy of Augusta: Foreign investment in Augusta174Transfer (net)+ 10Primary income (investment income earned abroad)72Imports of goods and services98Augusta investment abroad183Primary income (investment income paid abroad)68Exports of goods and services92a) What is the value of its balance of trade? b) What is the balance on its current account?

The balance of trade, commercial balance, or net exports, is the difference between the monetary…

Answered: The following balance of payments data…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following balance of payments data is for the economy of Augusta:

Foreign investment in Augusta	174
Transfer (net)	+ 10
Primary income (investment income earned abroad)	72
Imports of goods and services	98
Augusta investment abroad	183
Primary income (investment income paid abroad)	68
Exports of goods and services	92

a) What is the value of its balance of trade?
b) What is the balance on its current account?

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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