Concept explainers
(a)
Using the given data, calculate the merchandise
Concept introduction:
The periodical evaluation of trade balance i.e. the difference in the value between the imports and exports is known as Merchandise Trade Balance. The evaluation is performed on monthly and yearly basis.
Explanation of Solution
=
Here, the merchandise trade balance is -$2,075 billion. The negative balance indicates a
(b)
The balance on goods and services.
Concept introduction:
The periodical evaluation of trade balance i.e. the difference in the value between the imports and exports is known as Merchandise Trade Balance. The evaluation is performed on monthly and yearly basis.
Explanation of Solution
Import of Good and services =
Balance on Goods and Services =
Here, the balance on goods and services is -$100 billion. The negative balance indicates a trade deficit.
(c)
Using the given data, calculate the balance on current account.
Concept introduction:
The periodical evaluation of trade balance i.e. the difference in the value between the imports and exports is known as Merchandise Trade Balance. The evaluation is performed on monthly and yearly basis.
Explanation of Solution
Here, the balance on current account is $121.5 billion.
(d)
Using the given data, calculate the financial account balance.
Concept introduction:
The periodical evaluation of trade balance i.e. the difference in the value between the imports and exports is known as Merchandise Trade Balance. The evaluation is performed on monthly and yearly basis.
Explanation of Solution
Here, the financial account balance is -$145.0 billion. The negative balance indicates a trade deficit.
(e)
Using the given data, calculate the statistical discrepancy.
Concept Introduction:
The periodical evaluation of trade balance i.e. the difference in the value between the imports and exports is known as Merchandise Trade Balance. The evaluation is performed on monthly and yearly basis.
Explanation of Solution
Here, the statistical discrepancy is $23.5 billion.
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Chapter 20 Solutions
Econ Micro (book Only)
- Euro area Norway United Kingdom Poland China Local Price: (Foreign currency) 4.08 42.00 3.29 10.80 21.00 Actual Exchange Rate (Dollars per unit of foreign currency) 1.12 0.12 1.25 0.26 0.14 PPP Exchange Rate (U.S. Dollars per British pound) Source: "The Big Mac Index, Our Interactive Currency Comparison Tool, The Economist, last modified January 10, 2019, accessed September 27, 2019, https://www.economist.com/news/2019/07/10/the-big-mac-index. - Dollar Price (Dollars) Purchasing-power parity (PPP) theory states that exchange rates would need to equalize the prices of goods in any two countries. For the dollar price of a Big Mac to be the same in both countries, a U.S. citizen would need to be able to convert $5.74 into exactly GBP 3.29. To find the exchange rate at which hamburger purchasing power is the same in both countries, divide the price in the United States by price in the United Kingdom: $5.76 GBP 3.29 $1.74 per pound 4.11 2.81 2.94 4.57 5.04 Exporting Big Macs from the Euro…arrow_forwardEconomics (1) US Goods Exports (2) US Goods Imports (3) US Service Exports (4) US Service Imports (5) Net Investment Income (6) Net Transfers (7) Foreign Purchases of Assets in the United +30 States +$100 -$60 +40 -90 +20 -15 (8) US Purchases of Foreign Assets Abroad -$30 (9) Balance on Capital Account The table contains hypothetical data for the U.S. balance of payments. All figures are in billions of dollars. The United States has a balance of goods Multiple Choice A surplus of $40 billion. B deficit of $30 billion. C surplus of -$40 billion. D deficit of $160 billion. +5arrow_forward8arrow_forward
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- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax