IAI Actuarial Core Principles · Business Economics · Balance of payments and exchange rates
An economy has the following items for a year (in ₹ crore): exports of goods 800, imports of goods 950, net exports of services 260, net primary and secondary income inflows 40. What is the current account balance?
The current account is a surplus of ₹150 crore. The goods deficit of 150 is outweighed by the net services surplus of 260, and net income inflows add a further 40, giving -150 + 260 + 40 = +150.
- ADeficit of ₹150 crore
- BSurplus of ₹150 crore
- CSurplus of ₹110 croreCorrect
- DSurplus of ₹40 crore
- Deficit of ₹110 crore
Explanation
Goods balance = 800 - 950 = -150. Add net services 260 to get +110. Add net income 40 to get +150. So the surplus is ₹150 crore.
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