IAI Actuarial Core Principles · Business Economics · Balance of payments and exchange rates
In a given year, a country records the following (in ₹ crore): exports of goods 900, imports of goods 1,150, net exports of services 400, net primary and secondary income -80. What is the current account balance?
The current account balance is a surplus of ₹70 crore. Goods trade is -250, services add +400 giving +150, and net income of -80 reduces this to +70.
- ADeficit of 70Correct
- BSurplus of 70
- CDeficit of 250
- DSurplus of 170
- Deficit of 330
Explanation
Trade balance in goods = 900 - 1,150 = -250. Add net services +400 to get +150. Add net income -80 to get +70. Hence the current account is a surplus of 70. Wait: this gives +70, so the correct option is the surplus of 70.
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