Item Amount Merchandise exports Service exports Net unilater

Item Amount Merchandise exports Service exports Net unilateral transfers Net change in domestic liabilities abroad (financial outflows) Net change in foreign assets at home (financial inflows) Merchandise imports Service imports 600 125 50 -325 475 720 105 This nation\'s balance of trade is (Enter your response as a whole number and include a minus sign if necessary) lts current account balance is nter your response as a whole number and i c ude a minus sign i necessary And the nation\'s financial account balance is (Enter your response as a whole number and include a minus sign if necessary) Enter your answer in each of the answer boxes

Solution

A country\'s trade balance is the calculation of its exports minus its imports.

In above question,

Exports = Merchandise export + Service export = (600 + 125) = 725

Imports =  Merchandise import + Service import = (720 + 105) = 825

Nation\'s balance of trade = Exports - Imports = (725 - 825) = -100

The current account balance is defined as the sum of the balance of trade (goods and services exports minus imports) and unilateral transfer.

Nation\'s Current Account balance = balance of trade + net unilateral transfer = [-100 + (-50)] = -150

Nation\'s Financial  Account balance = Financial inflow - Financial outflow = (475 - 325) = 150