ib-economics-quantitative

Balance of Trade in services will be exports of services – imports of services =162,800 – 122,400 = + $40,400 million.Net income flows are the total of net income flows and net transfers, so they are33,100 – 38,500 = - $5,400 million.Current Account Balance is the balance of Trade in goods + Balance of Trade inServices + Net Income Flows = -273,400 + 40,400 – 5,400 = - $238,400 millionReserve assets funding is, in effect, the balancing item in the Capital and FinancialAccount. If the Capital and Financial Account needs to sum together to be +$238,400 million (see below), then the Reserve asset funding will be x in theequation below:130 + 105,885 + 84,700 + x + 26,500 = + $238,400 millionSo Reserve Asset Funding (x) = + $21,185 million.Capital and Financial Account Balance – the total of the Current Account and theCapital and Financial Account should sum to zero. So, if the Current Accountbalance is - $238,400 million, then the Capital and Financial Account balance shouldbe the opposite, i.e. + $238,400 million.The structure of the balance of payments for IBDP economics students is as below:Current accountBalance of trade in goodsBalance of trade in servicesIncomeCurrent transfersCapital accountCapital transfersTransactions in non-produced, non-financial assetsFinancial accountDirect investmentPortfolio investmentReserve assetsNow you have a go!!Current account = capital account + financial account + errors andomissionsProduced by Ian Dorton & Jocelyn Blink Page 68