28- Over the course of a year, a nation tracked its foreign transactions and arrived at the following amounts:Merchandise exports500Service exports75Net unilateral transfers10Net change in domestic liabilities abroad (financial outflows)−215Net change in foreign assets at home (financial inflows)300Merchandise imports600Service imports50 What is this nation’s balance of trade, current account balance, and capital account balance?

Balance of Trade is net of those transactions that result from exports and imports of goods. It…

Answered: 28- Over the course of a year, a nation…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter18: International Finance

Section: Chapter Questions

Problem 1.1P

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28- Over the course of a year, a nation tracked its foreign transactions and arrived at the following amounts:

Merchandise exports	500
Service exports	75
Net unilateral transfers	10
Net change in domestic liabilities abroad (financial outflows)	−215
Net change in foreign assets at home (financial inflows)	300
Merchandise imports	600
Service imports	50

What is this nation’s balance of trade, current account balance, and capital account balance?

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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