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Chapter 23: Q. 6 (page 575)

The GDP for the United States is \(18,036 billion and its current account balance is 鈥揬)484 billion. What percent of GDP is the current account balance?

Short Answer

Expert verified

2.68%

Step by step solution

01

Step1. Introduction

The current account of a nation shows the value of trade in goods and services along with the flow of income and aid. Balance in current account means that the nation is receiving the same amount of money it is sending.

02

Step2. Calculation

Current Account balance is calculated a percentage of GDP, by taking a ratio of the two and multiplying by 100, as calculated below:

Currentaccountbalanceas%ofGDP=CurrentAccountBalance/GDP=484/18036=2.68%

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Most popular questions from this chapter

Both the United States and global economies are booming. Will U.S. imports and/or exports increase?

If you observed a country with a rapidly growing trade surplus over a period of a year or so, would you be more likely to believe that the country's economy was in a period of recession or of rapid growth? Explain.

What three factors will determine whether a nation has a higher or lower share of trade relative to its GDP?

Why does the trade balance and the current account balance track so closely together over time?

Will nations that are more involved in foreign trade tend to have higher trade imbalances, lower trade imbalances, or is the pattern unpredictable?
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