3 Current financial and capital accounts Consider the

Last updated: 11/6/2023

3 Current financial and capital accounts Consider the following table showing hypothetical balance of payments data for the United States Complete the table by selecting the correct value for each missing entry Current Account U S merchandise exports U S merchandise imports Merchandise trade balance U S service exports U S service imports Services balance Goods and services balance Net investment income from abroad Net unilateral transfers Current account balance Capital and Financial Account Change in U S owned assets abroad Change in foreign owner assets in the U S Capital and financial account balance Statistical discrepancy Trade balance Balance of Payments Billions of dollars 70 67 70 were 2 8 40 42 According to the table the United States is running a trade 35 38 30 Suppose an American business owner purchases chocolates from Belgium in order to sell them in her shops This would be entered as a item under the section of the U S current account 0 The current account balance suggests that U S current account transactions created outpayments of foreign currencies from the United Sta the inpayments of foreign currencies to the United States Any surplus or deficit in one account must be offset by deficits or surpluses in other balance of payments accounts Because the current ac the excess of foreign currency held by Americans must either be loaned to foreigners or used to buy foreign stocks or bond