Calculate the current account balance for covidland

Assignment Help Macroeconomics

Reference no: EM132878986

The balance of payments of a country summarises the economic transactions of an economy with the rest of the world. Covidland released the following figures from its balance of payments accounts. In 2019 the country seemed to be doing well in terms of gains from trade.

Balance of Payment data for Covidland 2019

Merchandise Export    80
Merchandise Import 60
Services Exports    30
Services Imports              20
Investment income    10
Net transfer 20
Capital Inflows 20
Capital Outflows 80
Official Reserves    20

Discussion A. Use the information in the table above to calculate the following for Covidland

i.The balance of trade

ii.The current account balance

iii.The capital account balance

Discussion B. Discuss THREE (3) factors that can cause a current account surplus on the balance of payment account.

Discussion C. In 2020, COVID-19 wreaked havoc on the economies of small countries of Covidland. It had devastating consequences on the countries balance of payments. Propose THREE (3) measures that can be implemented by Covidland to correct a current account deficit.

Reference no: EM132878986

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