Answer to Question #280061 in Macroeconomics for Muniraaa

Question

Q1)On the basis of following information(All figures are in Rs),

A. CURRNT ACCOUNT

Exports= 150

Imports= 200

Services= 25

Income= ‐20

Transfer= 35

B. CAPITAL ACCOUNT

External Assistance(net)= 100

External Commercial Borrowing(net)= 150

Short Term Credit= ‐5

Banking Capital(net)= 250

Foreign Investment(net)= 300

Other Flows(net)= 70

Find,

 Trade Balance

 Current Account Balance

 Capital Account Balance

Answer 1

Trade Balance=exports -imports

$=150-200=-50$

$Current\space account \space balance=Exports−Imports+Services+income+Transfers\\=Rs150−Rs200+Rs25−Rs20+Rs35\\=−Rs10$

$Capital \space account \space balance=Net \space external \space assistance+ Net \space external\space borrowing+Short−term \space credit+ Net\space banking \space capital+ Net \space foreign \space investment+ Other \space net \space flows=Rs100+Rs150−Rs5+Rs250+Rs300+Rs70\\=Rs865$