Chapter 10 #8 Which of the following accurately describes how the balance of int

Question

Chapter 10

#8 Which of the following accurately describes how the balance of international indebtedness differs from the balance-of-payments?

a) The balance of international indebtedness indicates the international investment position of a country at one moment in time, whereas the balance-of-payments indicates all of the international monetary transactions of a country over a one-year period.

b) The balance-of-payments indicates the international investment position of a country at one moment in time, whereas the balance of international indebtedness indicates all of the international monetary transactions of a country over a one-year period.

10. Study Question #10 Ch 10 The following table shows international transactions of the United States Travel and transportation receipts, net Merchandise imports Unilateral transfers, net Allocation of SDRs Receipts on U.S. investments abroad Statistical discrepancy Compensation of employees Changes in U.S. assets abroad, net Merchandise exports Other services, net Payments on foreign investments in the United States Value (Billions of dollars) 25 450 -20 15 20 40 -150 375 35 -10 Use the information in the prior table to calculate the U.S. merchandise trade, services, goods and services, income, unilateral transfers, and current account balances in the table that follows. (Hint: Write numbers in absolute values and then indicate in the last column whether each value is a surplus or deficit.)

Explanation / Answer

Ans-8.

The balance of international indebtedness indicates the international investment position of a country at one moment in time. The balance of payments indicates all of the international monetary transactions of a country over a one year period.

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