(Table) for the Balance of Payments to Be in Balance

question 220

Multiple Choice

(Table) For the balance of payments to be in balance, the: $$\begin{array}{l}\text { Balance of Payments (billions of U.S. dollars) }\\\begin{array} { l c } \hline \text { Component } & \text { Amount } \\\text { Exports } & \$ 1,800 \\\text { Imports } & 2,300 \\\text { Income received } & 490 \\\text { Income payments } & 540 \\\text { Net transfers } & - 100 \\\text { Increase in foreign-owned } & \\\text { assets in the United States } & 700 \\\text { Increase in U.S.-owned } & \\\text { assets abroad } &100 \end{array}\end{array}$$

• A) capital account must be $600 billion.
• B) statistical discrepancy must be $100 billion.
• C) statistical discrepancy must be $50 billion.
• D) capital account must be $650 billion.

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Definitions:

Interest

The cost of borrowing money or the return earned on an investment, typically expressed as a percentage.

Interest-Bearing Note

A debt instrument in which the issuer is obligated to pay a specified interest rate on the principal amount at regular intervals until maturity, in addition to repaying the principal.

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money, or, for corporations, the price paid for the use of borrowed capital.