The answer of the question below is attached as a photo. please advise whether the answer is correct and explain why 27,38 and 42 are not used anywhere. In a given year, a country has $150 million more in imports than in exports, has to pay $25 million in interest and $75 million in principal on its foreign debt and it receives $100 million in workers’ remittances. The country’s overall government budget deficit for the year is $27 It also draws $38 million dollars from its reserves and receives $42 million in portfolio investments from foreign investors. It has no other income payments or receipts. Calculate the current account balance for this country in that year.
The answer of the question below is attached as a photo. please advise whether the answer is correct and explain why 27,38 and 42 are not used anywhere. In a given year, a country has $150 million more in imports than in exports, has to pay $25 million in interest and $75 million in principal on its foreign debt and it receives $100 million in workers’ remittances. The country’s overall government budget deficit for the year is $27 It also draws $38 million dollars from its reserves and receives $42 million in portfolio investments from foreign investors. It has no other income payments or receipts. Calculate the current account balance for this country in that year.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The answer of the question below is attached as a photo. please advise whether the answer is correct and explain why 27,38 and 42 are not used anywhere.
In a given year, a country has $150 million more in imports than in exports, has to pay $25 million in interest and $75 million in principal on its foreign debt and it receives $100 million in workers’ remittances. The country’s overall government budget deficit for the year is $27 It also draws $38 million dollars from its reserves and receives $42 million in portfolio investments from foreign investors. It has no other income payments or receipts.
Calculate the current account balance for this country in that year.
Transcribed Image Text:Given:
(Export-Import) =$150 million
Interest Payment=$25 million
Work Remittances=$100 million
Current balance = (Export – Import) – interest payment +
workers remitances
Current balance = -150 – 25 + 100
Current balance = -175 + 100
Current balance = -$75 million
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