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    swapneil
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    The document provides balance of payments data for merchandise exports and imports, service exports and imports, investment income receipts and payments, and transfers between a home country and other countries. It asks to calculate the merchandise trade balance, current account balance, and capital account balance. The merchandise trade balance is a deficit of 250 million rupees. The current account balance is a deficit of 650 million rupees. The capital account balance is a surplus of 600 million rupees.

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    PS_BoP

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    The document provides balance of payments data for merchandise exports and imports, service exports and imports, investment income receipts and payments, and transfers between a home country and other countries. It asks to calculate the merchandise trade balance, current account balance, and capital account balance. The merchandise trade balance is a deficit of 250 million rupees. The current account balance is a deficit of 650 million rupees. The capital account balance is a surplus of 600 million rupees.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    PS BoP

    Uploaded by

    swapneil
    The document provides balance of payments data for merchandise exports and imports, service exports and imports, investment income receipts and payments, and transfers between a home country and other countries. It asks to calculate the merchandise trade balance, current account balance, and capital account balance. The merchandise trade balance is a deficit of 250 million rupees. The current account balance is a deficit of 650 million rupees. The capital account balance is a surplus of 600 million rupees.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Problem Set (Balance of Payments)

    1. Here are some balance of payments data (values are in million rupees):
    Merchandise exports, 1000
    Merchandise imports, 1250
    Service exports, 900
    Service imports, 800
    Investment income receipts from assets, 1100
    Investment income payments on assets, 1400
    Transfers from home country to other countries, 200
    Increase in home country’s ownership of assets abroad, 1400
    Increase in foreign ownership of assets in home country, 2000

    Find the merchandise trade balance, the current account balance and the capital account balance.

    Solution:

    Merchandise trade balance= (1000-1250) = (-250); 250 deficit

    Current A/C= Merchandise trade balance+ Invisibles A/C


    = [(-250)] + [(900-800) + (1100-1400) + (-200)]
    = -650 (current account deficit)

    Capital A/C= (inflow-outflow) = 2000-1400= 600 (capital account surplus)

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