6. Balance of payments The following tables show a hypothetical balance of payme
ID: 1153153 • Letter: 6
Question
6. Balance of payments
The following tables show a hypothetical balance of payments statement for the United States. (Note: All values are in billions of dollars.) Complete the tables by filling in the missing cells. (Hint: Use the negative sign for all debits, and assume that the total balance of payments equals zero.)
Balance of Payments
CURRENT ACCOUNt Debits Credits Balance
U.S. Merchandise Exports 220
U.S. Merchandise Imports –900
Balance of Merchandise Trade _______
U.S. Service Exports ______
U.S. Service Imports –360
Balance on Service Trade 100
Balance on Goods and Services _______
Income Receipts of Americans from Abroad 670
Income Receipts of Foreigners in the U.S. _______
Net Income Receipts 55
Net Unilateral ________
Transfers Balance on Current Account –820
CAPITAL ACCOUNT Debits Credits Balance
Foreign Investment in the U.S. 920
U.S. Investment Abroad –570
Balance on Capital Account __________
OFFICIAL RESERVE TRANSACTIONS Debits Credits Balance
U.S. Official Reserve Assets _______
Foreign Official Assets in the U.S. 520
Balance, Official Reserve Account _______
According to the data presented earlier, there is a merchandise trade__________(surplus/ deficit)of ____________$ billion.
Explanation / Answer
Balance of Payments
Current account Debits Credits Balance
U.S. Merchandise Exports 220
U.S. Merchandise Imports –900
Balance of Merchandise Trade -680
U.S. Service Exports 460
U.S. Service Imports –360
Balance on Service Trade 100
Balance on Goods and Services -580
Income Receipts of Americans from Abroad 670
Income Receipts of Foreigners in the U.S. -615
Net Income Receipts 55
Net Unilateral transfers -295
Balance on Current Account –820
Capital account Debits Credits Balance
Foreign Investment in the U.S. 920
U.S. Investment Abroad –570
Balance on Capital Account -350
OFFICIAL RESERVE TRANSACTIONS Debits Credits Balance
U.S. Official Reserve Assets 650
Foreign Official Assets in the U.S. 520
Balance, Official Reserve Account 1170
According to the data presented earlier, there is a merchandise trade deficit of 680 $ billion.
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