# If the United States imports goods and services for a total of​ \$45 billion, exports goods and services for a total of​ \$40 billion, records​ \$4 billion as net interest and zero as net​ transfers, then the U.S. current account balance is

If the United States imports goods and services for a total of​ \$45 billion, exports goods and services for a total of​ \$40 billion, records​ \$4 billion as net interest and zero as net​ transfers, then the U.S. current account balance is?

Share

1. To calculate the U.S. current account balance, we need to consider all the components of the current account: goods and services (trade balance), net primary income (which includes interest), and net secondary income (which includes transfers).

Given:

U.S. imports of goods and services: \$45 billion
U.S. exports of goods and services: \$40 billion
Net interest: \$4 billion
Net transfers: \$0

Step 1: Calculate the trade balance (net exports)
Trade balance = Exports – Imports
Trade balance = \$40 billion – \$45 billion = -\$5 billion (deficit)

Step 2: Calculate the net primary income
Net primary income = Net interest = \$4 billion

Step 3: Calculate the net secondary income
Net secondary income = Net transfers = \$0

Step 4: Calculate the current account balance
Current account balance = Trade balance + Net primary income + Net secondary income
Current account balance = -\$5 billion + \$4 billion + \$0 = -\$1 billion (deficit)

Therefore, the U.S. current account balance is a deficit of \$1 billion.

2. -\$1 billion.