Suppose that during a recent year for the United? States, merchandise imports we
ID: 2439857 • Letter: S
Question
Suppose that during a recent year for the United? States, merchandise imports were
?$2.1
?trillion, unilateral transfers were a net outflow of
?$0.2
?trillion, service exports were
?$0.3
?trillion, service imports were
?$0.1
?trillion, and merchandise exports were
?$1.4
trillion.
The merchandise trade deficit was
??
trillion. ?(Enter your response rounded to one decimal? place.)
The balance on goods and services was
??
trillion. ?(Enter your response rounded to one decimal place and include a minus sign if? necessary.)
The current account balance was
??
trillion. ?(Enter your response rounded to one decimal place and include a minus sign if? necessary.)
Explanation / Answer
The merchandise trade deficit(-) is = Merchandise export - Merchandise import = $1.4 - $2.1 = -$0.7 trillion.
Balance on goods and services was = Export of goods and services minus import of goods and services = $(1.4+0.3) trillion - $(2.1+0.1) trillion = -$0.5 trillion . It means trade balance in deficit of 0.5 trillion dollars.
The current account balance was = Export of goods and services - Import of goods and services + net flow of unilateral transfer = $(1.4+0.3) trillion - $(2.1+0.1) trillion -$0.2 trillion (as unilateral transfer is net outflow) = ($1.7 -$2.2 -$0.2) trillion = -$0.7 trillion. So current account balance is in deficit of 0.7 trillion dollars.
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