What is a nation's cash inflow and outflow on its current account and its capital account...
What is a nation's cash inflow and outflow on its current account and its capital account given the following information?
imports $145
exports 211
direct investments abroad 72
foreign investments in the country 143
foreign purchases of domestic securities 86
purchases of foreign securities 29
net income from foreign investments 37
government spending abroad 22
Homework Answers
Solution:
a)Nation's current account
Current account represent a country's net income over a period of time,While the capital account records the net change of assets and liablities during a particular year
| Cash Inflow | Cash outflow |
| exports =$211 | imports =$145 |
| net income from foreign Investment=$37 | government spending abroad=$22 |
b)Nation's capital account
| Cash inflow | Cash outflow |
| foreign investments in the country=$143 | Direct investments abroad=$ 72 |
| foreign purchases of domestic securities=$ 86 | purchases of foreign securities=$29 |
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