Question

Table 9.2 International Transactions Account Goods imports 250 Goods exports 200 Services imports 50 Services exports...

Table 9.2 International Transactions Account

Goods imports

250

Goods exports

200

Services imports

50

Services exports

175

Net unilateral transfers

-25

Investment income received

100

Investment income paid

-50

Capital account

-25

Net change in U.S. assets abroad

100

Net change in foreign assets in the U.S.

-250

Net change in financial derivatives

-25

Statistical discrepancy

Based on Table 9.2, this country has a statistical discrepancy of

100
50
0
-100
-200

Homework Answers

Answer #1

Current account balance is the sum of balance of payments on goods and services and net international transfer payments and factor income

CA = (200 - 250) + (175 - 50) + (-25) + (100 - 50) = 100

Financial account balance is equal to the difference between the amount of sale of assets to foreigners and its purchases of assets from them

FA = (100 - 250) - 25 = -175

Capital account = -25

Statistical discrepancy = CA + FA + Ca = 100 - 175 - 25 = -100

Hence, Statistical discrepancy is -100.

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