Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:
No. Item Million USD

1

Exports (of Goods only)

180

2

Imports (of Goods only)

260

3

Net Invisibles

a. Non-factor services

b. Income

C. Transfers

 

40

-20

34

On the basis of the above table, the Current Account Balance will be _____________.

Options:

+ 36 million USD

-26 million USD

- 36 million USD

+ 26 million USD

Correct Answer:

-26 million USD

Explanation:

The correct answer is option (2) : -26 million USD

To calculate the Current Account Balance, we sum of the values of exports and invisibles (non-factor services, income, and transfers) and then subtract imports.

Current Account Balance = (Exports + Invisibles ) - Imports

Current Account Balance = (180 + (40 - 20 + 34)) - 260

Current Account Balance = 234 - 260

Current Account Balance = - 26

Therefore, the correct answer is  : - 26 million USD