Question

Alpha’s balance-of-payments data for 2008 are shown below. All figures are in billions of dollars. What are the (a ) balance on goods, (b ) balance on goods and services, (c ) balance on current account, and (d ) balance on capital and financial account? Suppose Alpha needed to deposit $10 billion of official reserves into the capital and financial account to balance it against the current account. Does Alpha have a balance-of-payments deficit or surplus? Explain.

Goods exports
$+40
Goods imports
- 30
Service exports
+15
Service imports
- 10
Net investment income
-5
Net transfers
+10
Balance on capital account
Foreign purchases of Alpha assets
+20
Alpha purchases of assets abroad
-40
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Transcribed Image Text

Goods exports $+40 Goods imports - 30 Service exports +15 Service imports - 10 Net investment income -5 Net transfers +10 Balance on capital account Foreign purchases of Alpha assets +20 Alpha purchases of assets abroad -40

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