Question

An economy has a trade surplus of 25 billion dollars and an overall current account deficit of 47 billion dollars. What will be the balance of invisibles for this economy?

• A. A surplus of 72 billion dollars
• B. A surplus of 22 billion dollars
• C. A deficit of 22 billion dollars
• D. A deficit of 72 billion dollars

Answer 1

Answer: (C)

A deficit of 22 billion dollars

Answer 2

The balance of invisibles = current account deficit – trade surplus = 47 – 25 = 22 billion dollars deficit.