Mindtap Economics, 1 Term (6 Months) Printed Access Card For Mceachern's Econ Micro 6
Mindtap Economics, 1 Term (6 Months) Printed Access Card For Mceachern's Econ Micro 6
6th Edition
ISBN: 9781337914406
Author: MCEACHERN, William A.
Publisher: Cengage Learning
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Chapter 20, Problem 1P
To determine

(a)

Using the given data, calculate the merchandise trade 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.

Expert Solution
Check Mark

Explanation of Solution

Merchandise Trade Balance = Merchandise Export – Merchandise Import

= $350$2425=$2,075

Here, the merchandise trade balance is -$2,075 billion. The negative balance indicates a trade deficit.

To determine

(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.

Expert Solution
Check Mark

Explanation of Solution

Balance on Goods and Services = Export of Goods and Services – Import of Goods and Services Export of Goods and services =$350+$2145=$2495

Import of Good and services = $2425 + $170=$2595

Balance on Goods and Services = $2495$2595=$100

Here, the balance on goods and services is -$100 billion. The negative balance indicates a trade deficit.

To determine

(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.

Expert Solution
Check Mark

Explanation of Solution

Balance on Current Account = Net Income Transferred – Inflow of Foreign Currency

= $221.5 $100.0=$121.5

Here, the balance on current account is $121.5 billion.

To determine

(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.

Expert Solution
Check Mark

Explanation of Solution

Financial Account Balance = Capital Inflow – Capital Outflow = 100.0 – 245.0 = -$145.0

Here, the financial account balance is -$145.0 billion. The negative balance indicates a trade deficit.

To determine

(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.

Expert Solution
Check Mark

Explanation of Solution

Statistical Discrepancy = Capital Outflow – Net Income Transferred = 245.0 – 221.5 = $23.5

Here, the statistical discrepancy is $23.5 billion.

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Mindtap Economics, 1 Term (6 Months) Printed Access Card For Mceachern's Econ Micro 6

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