Homework (Ch 10) Travel and transportation receipts, net Merchandse imports Unil
ID: 1163254 • Letter: H
Question
Homework (Ch 10) Travel and transportation receipts, net Merchandse imports Unilateral transfers, net Alocation 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 (Bilmions of dollars) 25 450 20 15 20 40 150 375 35 Use the information i account belances in the table that folows. (Hint: Write numbers in abselute values surplus or deficit) n the prior table to calcafate the U.S merchandise trade, services, goods and services, income, uniateral transfers, and current and then indicate in the last column whether each value is a (Dions of doltars) Deficit or Surplus Unlateral trasers balances pertains to Merchandise trade Unlateral transfers investment position of the Usited States?Explanation / Answer
Solution:
1)
Values
Deficit or surplus
Merchandise trade
-$75
Deficit
Services
$60
Surplus
Goods and services
-$15
Deficit
Income
$5
Surplus
Unilateral transfers
-$20
Deficit
Current account
-$30
Deficit
Explanation:
1) Merchandise trade = Merchandise exports - Merchandise import = $375 - $450 = -$75
2) Services = Other services, net + Travel and transportation, net =$35 + $25 = $60
3) Goods and services account = Services account balance + Merchandise trade account = $60 + (-$75) = -$15
4) Net investment income = Payments on foreign investment in the U.S. + Receipts on U.S. investment abroad = -$10 + $20 = $10
Income = Investment income, net + Compensation of employees = $10 + (-$5) = $5
5) Unilateral transfers = -$20 (Already given in the table)
6) Current account = Income balance + Goods and services balance + Unilateral transfers balance
= $5 + (-$15) + (-$20)
= -$30
2) Solution: Current account
Explanation: The investment position in United States is impacted by current account deficit
Values
Deficit or surplus
Merchandise trade
-$75
Deficit
Services
$60
Surplus
Goods and services
-$15
Deficit
Income
$5
Surplus
Unilateral transfers
-$20
Deficit
Current account
-$30
Deficit
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