Greece has a GDP of some 200 billion euros, with exports of about 40 billion euros and imports of about 50 billion euros. Assume net unilateral transfers are zero, and the statistical discrepancy in the balance of payments is zero.
Show your calculations and answers after each sub-part to this question:
a. What is Greece’s expenditure on the sum of consumption (C), investment (I) and government purchases (G)?
b. What is Greece’s current account balance?
c. What is Greece’s current account balance as a percentage of GDP?
d. What is Greece’s balance on the capital & financial account of the balance of payments?
e. Greece’s government sector budget deficit this year is 2.0% of GDP. What is the balance of private sector saving and investment, as a percentage of GDP?
f. Last year Greece’s foreign debt was 325 billion euros. Based on your answers to the above questions, what will Greece’s foreign debt be this year?