Need help in this question. All subquestion. Please give me explain not just ans

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Need help in this question. All subquestion. Please give me explain not just answer. Problems: Chapter 10 Use the data below to calculate the values for each of the following: a. the balance of trade b. net exports c. the CA dthe net private K/F flow 1 e balance of payments the country's BII at the end of this year if it was a net creditor by 400 last year 2 the value for official reserve transactions merchandise exports 400 US earnings on investments abroad 100 Fgn tourist expend in the US 250 merchandise imports 700 US purchases of assets from foreigners 800 Errors and Omissions 0 US tourists expend abroad Service imports 200 100 n purchases of assets from US 600 Fgn eamings on investments in US- 150 Service exports 350 =400

Explanation / Answer

a) Balance of trade-

Merchandise export- Merchandise Import

= 400-700

= -300

Therefore the balance of trade is negative.

The export and import of services are not included in balance of trade , only visible/tangible items are included.

b) Net exports-

= Exports -Imports

= ( Merchandise exports+service Exports)-  ( Merchandise import+service import)

=(400+350)-(700+200)

= 750-900

= -150

Net exports includes the export minus import for goods as well as services.

c)the CA-

Net exports+ Net factor payments from abroad

=-150+ +(Fgn tourist expend in US- US tourist expend abroad)+(Fgn purchases of assets in US- US purchases of assets from Forigners)

=-150+(250-100)+(600-800)

= -200

d)the net Private K/F flow-

US earnings on investment abroad- Fgn earnings on investments in US+(Fgn purchases of assets in US- US purchases of assets from Forigners)

=100-150+600-800

= -250

e)The balance of payment=

Net exports +( US earning in inventment abroad- Fgn earning on investment in US)+(Fgn tourist expend in US- US tourist expend abroad)+(Fgn purchases of assets in US- US purchases of assets from Forigners)

=-150+(100-150)+(250-100)+(600-800)

= -200+150-200

= -250

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