calculate something to do with the CAD/BOP (1 Viewer)

[nitro.vo]

hi.

Just confirming i know what to do with these questions and need some help.

questions: calculate the capital and financial account balance for country X for ear 1 and 2.

year 1 = -85b
year 2 = +10b

Now the BOP = CA + C/F A so if the CA is a minus, i turn it into a positve and vica versa?

calculate net income for year 1 and 2

This question i dont understand how to get the net income.

year 1 = 50b
year 2 = 40b

all my teachers have gone awya for the year levels school camps so you guys are my last hope

Thankyou

 

[Riviet]

If the current account is a negative, ie in deficit, then there will be an equal capital & financial account surplus. Note that this works in reverse, if the CA is positve and in surplus, then the C&FA will be negative and in deficit.

+(current account) = -(capital and financial account)

OR

-(current account) = +(capital and financial account)

This means that when you add the current account to the capital & financial account, this will always equal zero.

ie BOP = current account + capital & financial account = 0.

________________________________________


net income = income credits - income debits

For year 1, net income = 70 - 20
= $50 bn

In year 2, net income = 70 - 30
= $40 bn

 

[nitro.vo]

thanks alot champ