To calculate:
The current account balance, financial account balance, and the amount of increase in the official reserves.
Explanation of Solution
Current account balance would consist of all national transactions such as trade in commodities and services.
Financial account balance would involve all financial transactions such as investments, and dividends.
The official reserves of Antarctica would consist of the final balance of payments balance.
Hence, Antarctica holds a negative balance of $5 billion in their official reserves.
Balance of payment:
Balance of payment is a statement which contains all financial transactions between one country and the rest of the world for a specific time period.
Want to see more full solutions like this?
Chapter 34 Solutions
Foundations of Economics (8th Edition)
- The table shows the value of exports and imports for the small country of Cherubland. Their chief export is tiny cupid arrows. Use the table to answer the questions. Credits (+) Goods 195 Services 50 Investment Income 23 Transfers 0 Asset Sales 417 What is the balance on goods for Cherubland? Debits (-) 400 61 13 1 195 What is the balance on the current account for Cherubland?arrow_forwardView the data below for the exchange rate between the US dollar and the Japanese yen. How many yen could you get per dollar at the earliest date shown on the chart? Explain. How many yen could you get per dollar at the most recent date shown on the chart? Explain. Has the dollar appreciated or depreciated in value over time? Explain.arrow_forwardThere is a Eurozone recession. what are some strategies that the Eurozone member nations can consider to fix it? (Specific monetary and fiscal policies).arrow_forward
- Examine the following table: Value of Exports (in billions) Value of Imports (in billions) Balance Goods $100 $200 -$100 Services $150 $100 $50 Income Receipts and Payments $300 $200 $100 Unilateral Transfers $30 $60 -$30 $580 $560 $20 The data highlighted in the last row of the table represent the: A) Current Account Balance B) Income Balance C) Merchandise Trade Balancearrow_forwardWhat is more important, a countrys current account balance or GDP growth? Why?arrow_forwardThe GDP for the United States is 18,036 billion and its current account balance is 484 billion. What percent of GDP is the current account balance?arrow_forward
- Write 9 recommendations to reduce trade deficit for Pakistan?arrow_forwardCurrent Account Balance Capital and Financial Account Balancearrow_forwardQuestion: "In a scenario where a country operates under a floating exchange rate system, what would likely be the effect of a significant increase in its central bank's interest rates on the country's current account balance? Assume other global economic conditions remain constant." a) The current account balance will improve due to increased foreign investment. b) The current account balance will deteriorate due to increased imports and decreased exports. c) The current account balance will improve due to decreased imports and increased exports. d) The change in interest rates will have no effect on the current account balance.arrow_forward
- how globalization product works in economyarrow_forwardIdentify the current account balance, financial account balance, and reserve balance? (a) An American company sells $30,000 worth of machinery to a British company. (b) an American woman visits her husband in Japan. She spends $5,000 in Japan before returning to the United States. (c) the US Red Cross sends $20,000 worth of flood-relief goods to Chile; (d) an American purchases $5,000 worth of French bonds; (e) a US bank lends $10,000 to a Canadian firm for 90 days.arrow_forwardBalance of Payments (Billions of dollars) Current Accounts U.S. merchandise exports +70 U.S. merchandise imports -67 Merchandise trade balance U.S. service exports U.S. service imports +70 Services balance +35 Goods and services balance +38 Net investment income from abroad -2 Net unilateral transfers -8 Current account balance Financial Accounts Change in U.S.-owned assets abroad Change in foreign-owner assets in the U.S. -40 +42 Financial account balance Statistical discrepancy -30 Trade balance Suppose an Argentine logging company purchases American-made chainsaws. This would be entered as a item under the section of the U.S. current account. According to the table, the United States is running a trade The current account balance suggests that U.S. current account transactions (exports and imports of goods and services, as well as inflow and outflow of investment income and transfers) created outpayments of foreign currencies from the United States that were the inpayments of…arrow_forward
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax