Quick Balance of Payments Question (1 Viewer)

[taggs-sasuke]

Balance on goods and services - 16
Net transfers - 2
Net income - ?
Capital account - 17
Financial account - 13

What is the value of Net income for this economy?

a. 48
b. 30
c. 12
d. 30

I thought it was C but the answer is A - some help please?

Source: Board of Studies Online Multiple Choice

Thanks

 

[FFC]

OK, the Balance of Payments will balance, therefore the deficit of one account will equal the surplus of the other.

The only complete account is the capital and financial account, which is 17+13 = 30 in surplus. Therefore the current account is 30 in deficit.

From the BoGS and net transfers, the CA is 18 in surplus, and as such the income deficit must be 48, i.e. net income would be -48. Therefore the answer is A.

 

[taggs-sasuke]

Oh yeah.

Thanks...

 

[FFC]

Oh yeah.

Thanks...

No Probs!