Economics 2281 · O Level · Current account of balance of payments

Current account of balance of payments — practice question

A developing economy records a $75 billion surplus on trade in goods and a $25 billion deficit on trade in services, and its current account is balanced overall. Which values of net income (primary income) and net transfers (secondary income) are needed for the current account to remain in balance?

  • Anet income: deficit of $20 billion; net transfers: surplus of $120 billion
  • Bnet income: deficit of $30 billion; net transfers: deficit of $70 billion
  • Cnet income: surplus of $35 billion; net transfers: surplus of $15 billion
  • Dnet income: surplus of $40 billion; net transfers: deficit of $90 billion

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