The table gives some information about Nordland\'s international transactions It

Question

The table gives some information about Nordland's international transactions Item Imports of goods and services Foreign investment in Nordland Exports of goods and services Nordland's investment abroad Net interest income Net transfers Statistical discrepanc Billions of dollars 1,100 800 900 500 If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. The current account balance isbillion dollars The capital and financial account balance is billion dollars. The official settlements account balance is billion dollars -20 - 20 Nordland's official reserves are

Explanation / Answer

Current account Balance = Exports - Imports + Net income from abroad + Net current transfers

= (900-1100) + 3 - 20 =$ 217 billion

Capital and financial account balance = Foreign investment in country - investment in foreign country

= 800 - 500 = $300 billion

Official settlements account balance = Current account balance + capital account balance

= -217+ 300 = $83 billion

Official Reserves = Used to facilitate the BOP deficit

   = $81 billion + $20 billion (statistical discrepancy) = $101 billion

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