Refer to the table below. The balance on the current account was a:
The following table contains hypothetical data for the U.S. balance of payments in a year. Answer the following question on the basis of these data. All figures are in billions of dollars.
U.S. goods exports +$390
U.S. goods imports -498
U.S. service exports +133
U.S. service imports -107
Net investment income +12
Net transfers -22
Capital account -5
Foreign purchases of U.S. assets +156
U.S. purchases of foreign assets -59
A. $51 billion surplus
B. $92 billion deficit
C. $22 billion surplus
D. $82 billion deficit
B. $92 billion deficit
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Monetarists believe the best way to halt inflation is to
a. put more money into the economy b. raise taxes c. slow the growth rate of the money supply d. impose controls on prices e. none of the above
The case of New Zealand, described in the text, concludes that a country's current account deficits are not sustainable if a country's
A) prospects for long term economic growth are above its global deficit growth. B) ability to sustain current account deficits is questionable. C) unproductive industrial sectors and its prospects for long run growth. D) labor productivity is below that of most other countries. E) exchange rate has fallen relative to other currencies.