If exports of goods and services are $450 billion, imports of goods and services
ID: 1226714 • Letter: I
Question
If exports of goods and services are $450 billion, imports of goods and services are $350 billion, unilateral transfers made by U.S. citizens to foreigners are $5 billion, and unilateral transfers made by foreigners to U.S. citizens are $4 billion, then the current account balance will be __________ billion.
Question 1 options:
+$101
-$101
-$99
+99
An American computer is priced at $2,000. If the exchange rate between the U.S. dollar and the Japanese yen is $0.009 per yen, the price of the computer in Japan is __________ yen.
Question 4 options:
222,222
1,800
18
+$101
-$101
-$99
+99
An American computer is priced at $2,000. If the exchange rate between the U.S. dollar and the Japanese yen is $0.009 per yen, the price of the computer in Japan is __________ yen.
Question 4 options:
222,222
1,800
18
Explanation / Answer
If exports of goods and services are $450 billion, imports of goods and services are $350 billion, unilateral transfers made by U.S. citizens to foreigners are $5 billion, and unilateral transfers made by foreigners to U.S. citizens are $4 billion, then the current account balance will be + $99 billion.
This is because
the current account balance = (exports of goods and services - imports of goods and services) + (unilateral transfers made by foreigners to U.S. citizens - unilateral transfers made by U.S. citizens to foreigners)
the current account balance = ($450 - $350) + ($4 - $5) = $99.
An American computer is priced at $2,000. If the exchange rate between the U.S. dollar and the Japanese yen is $0.009 per yen, the price of the computer in Japan is 222,222 yen.
This is because from question we see that exchange rate is $0.009 per yen.
That means 1 yen = $0.009
$1 = (1 / 0.009) yen
An American computer is priced at $2,000. Then at the above mentioned exchange rate, the price of this computer in Japan is [2000 * (1 / 0.009)] yen = 222,222 yen.
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