Question

Suppose that during a recent year for the United States, merchandise imports were $\backslash (2$trillion, unilateral transfers were a net outflow of$\backslash )0.2$trillion, service exports were trillion, service imports were$\backslash (0.1$trillion, and merchandise exports were$\backslash )1.4$trillion.

a. What was the merchandise trade deficit?

b. What was the balance on goods and services?

c. What was the current account balance?

Short answer

we conclude the above a,b,c.

Step-by-step solution

Introdution

The following is data on US international commerce in a certain year:

Merchandise imports - $\$2$trillion

Unilateral transfers of net outflow - $\$0.2$trillion

Service exports - $\$0.2$trillion

Service imports - $\$0.1$trillion

Merchandise exports - $\$1.4$trillion

Explanation-part(a)

The net of merchandise imports and exports is the merchandise trade deficit. There is a deficit because merchandise imports exceed exports. The merchandise deficit can be calculated as follows:

Trade deficit in goods merchandise exports Imports of merchandise

Part B

balance of goods and servies is equal to net of goods