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Balance of payments - calculation (1)

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Credits (+), Debits (-) $m (2011)
Current account
1 Exports of goods ??
2 Imports of goods -3155
3 Balance of trade in goods -405
4 Exports of services 580
5 Imports of services -490
6 Balance of trade in services ??
7 Income receipts (investment income) 245
8 Income payments (investment income) ??
9 Net income receipts (investment income) -35
10 Current transfers (net) -55
11 Net income flows ??
12 Current account balance ??
Capital account
13 Capital account transactions (net) 250
Financial account
14 Direct investment, net 75
15 Portfolio investment, net ??
16 Reserve assets funding 65
17 Errors and omissions 60
18 Capital and financial account balance 405


Question 1

Define the following terms:

(a) Net current transfers
(b) Financial account
(c) Capital account

Question 2

Calculate the missing figures from the balance of payments account for Country Y given above and place them in the appropriate box.

Question 3

Suggest, and explain, the action(s) government will need to take to maintain a fixed exchange rate. .

Question 4

Evaluate two possible policies to correct the current account position country Y faces.

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