Balance of Payments (1 Viewer)

[bro66404]

Hi,

Does anyone have an idea why my response to this question is incorrect?

Exports of goods $500 billion
Imports of goods $600 billion
Net services –$100 billion
Net primary income –$200 billion
Net secondary income $15 billion
Capital account $85 billion
Financial account $285 billion
Reserve assets $15 billion

According to the information in the table which of the following statements is correct
for this economy?
(A) The goods and services balance is a surplus of $1000 billion.
(B) The current account is in deficit of $385 billion.
(C) The balance on capital and financial account is a surplus of $370 billion.
(D) The balance of payments is in deficit by $1200 billion

I said (C) because I thought reserve assets were already a part of the financial account (so you don't have to add it on) which would make the capital and financial account in a surplus of $385 billion. Then again (500-600) + (-100) + (-200) + 15= -385 making (B) correct too? The answer is (B) but why isn't (C) correct too? DOes it have something to do with net errors and omissions?

Thanks!

 

[knxd]

No
reserve assets has to be added on to the capital and financial acc, so
85+285+15=385
C is not correct

 

[kittystar]

You have to add the reserve assets onto capital and financial
C&F = $385bn
CA = -$385bn

(B) is correct. C is a trick answer of sorts.

Reserve assets are the currency primarily used by nations for their foreign reserves