Question

In 2008, the U.S. current account balance was -$706 billion, net interest was +$119 billion, net transfers were -$128 billion, and exports were +$1,827 billion. Therefore, imports were

A. +$1,112 billion.

B. +$2,524 billion.

C. -$2,524 billion.

D. +$2,780 billion.

E. -$1,112 billion.

Answer 1

Solution:-Option B is correct.

A.+$2,524 billion.

Explaination:-Current Account=Records receipts from the sale of goods and services to other countries (exports), minus payments for goods an services bought from other countries (imports), plus the net amount of interest and transfers (such as foreign aid payments) received from and paid to other countries

Current Account=*Net exports + Net interest + Net transfers-imports

Imports=Net exports + Net interest + Net transfers-Current Account

Imports =+$119-$128+$1,827+$706

Imports=+$2,524 billion.