Balance of payments - calculation (2)
| Credits (+), Debits (-) | $m (2011) | |
|---|---|---|
| Current account | ||
| 1 | Exports of goods | 5850 |
| 2 | Imports of goods | -5250 |
| 3 | Balance of trade in goods | ?? |
| 4 | Exports of services | 2100 |
| 5 | Imports of services | -1900 |
| 6 | Balance of trade in services | ?? |
| 7 | Income receipts (investment income) | ?? |
| 8 | Income payments (investment income) | -525 |
| 9 | Net income receipts (investment income) | -50 |
| 10 | Current transfers (net) | 120 |
| 11 | Net income flows | ?? |
| 12 | Current account balance | 870 |
| Capital account | ||
| 13 | Capital account transactions (net) | -390 |
| Financial account | ||
| 14 | Direct investment, net | ?? |
| 15 | Portfolio investment, net | -160 |
| 16 | Reserve assets funding | -55 |
| 17 | Errors and omissions | -10 |
| 18 | Capital and financial account balance | ?? |
Question 1
Define the following terms:
(a) Direct investment
(b) Portfolio investment
(c) Errors and omissions
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
If country Y has a floating exchange rate system, draw a diagram to show the likely impact of the balance of payments situation shown above on the country's exchange rate.
Question 4
Evaluate two possible policies to correct the current account position country Y faces.
