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10 April, 12:24

If the balance on the current account is $346 billion and the balance on the financial account is - $204 billion, what is the balance on the capital account, assuming no statistical discrepancy?

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  1. 10 April, 12:41
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    The balance on the capital account=-$142 billion

    Explanation:

    The formula for determining the balance on the capital account can be expressed as;

    CU+FA+CA+SD=0

    where;

    CU=balance on the current account

    FA=balance on the financial account

    CA=balance on the capital account

    SD=statistical discrepancy

    In our case;

    balance on the current account=$346 billion

    balance on the financial account=-$204 billion

    balance on the capital account=unknown=c

    statistical discrepancy=0

    replacing;

    346 + (-204) + c+0=0

    142+c=0

    c=-142

    The balance on the capital account=-$142 billion
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