MU Balance Of Payments Worksheet

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Instructions: The table below shows actual data of the U.S. current account. Please read Chapter 13 National and International Accounts: Income, Wealth, and the Balance of Payments (p. 475 – 480; 484 – 492; 495 – 497) and type up your answers to the following questions:.Please give an example of a transaction that will be recorded in line 10.”Primary income” in line 5 and line 13 refers to trade in factor services. Please give an example of a transaction that will be recorded in line 5.”Secondary income” in line 8 and line 16 refers to unilateral transfers. Please give an example of a transaction that will be recorded in line 16.How would you calculate trade balance? What is trade balance in 2017 and 2018, respectively?How would you calculate net factor income from abroad (NFIA)? What is NFIA in 2017 and 2018, respectively?Did the U.S. run a current account deficit or surplus in 2017 and in 2018? Why?Will budget deficits necessarily cause current account deficits? Use the current account identity to explain.Based on U.S. current account balances in 2017 and 2018, did the U.S. run a financial account deficit or surplus? Use the balance of payments identity to explain.Is the U.S. considered a net borrower or a net lender in both years? What does this mean for U.S. net holdings of external assets?

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Bureau of Economic Analysis
Table 1.1. U.S. International Transactions
[Millions of dollars]
Release Date: March 27, 2019 – Next Release Date: June 20, 2019
2017
2018
3,433,239 3,701,694
Line
Current account
Exports of goods and services and income
1
receipts (credits)
2 Exports of goods and services
3 Goods
4 Services
5 Primary income receipts
6 Investment income
7 Compensation of employees
8 Secondary income (current transfer) receipts 1
Imports of goods and services and income
9
payments (debits)
10 Imports of goods and services
11 Goods
Services
13 Primary income payments
Investment income
15 Compensation of employees
Secondary income (current transfer) payments
16
1
2,351,072 2,500,756
1,553,383 1,672,331
797,690 828,425
928,118 1,060,362
921,816 1,053,931
6,302 6,431
154,049 140,576
3,882,380 4,190,166
12
2.903,349 3,122,862
2,360,878 2,563,651
542,471 559,211
706,386 816,066
686,699 795,820
19.687 20.246
14
272,645
251,237

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balance of payments

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