Question: This exercise will give you practice in putting together the pieces of the current account of the balance of payments. Choose a less-developed country that interests you or which you have been assigned. Make a table with your country name at the top and include the numerical values for the requested items for the two years of data which are available. Refer back to Table 15.1 for help in how the current account is constructed. You can find the data at https://devdata.worldbank.org/wdi2006/contents/Section4.htm, Table 4.15 (if the link no longer works, go to https://www.worldbank.org and find World Development Indicators; the data will be in the Economics section).
a Record total goods and service exports and imports and calculate the balance of trade for the two years.
b Record your country's net factor payments ("net income") for those two years.
c Record your country's net transfers ("net current transfers") for those two years.
d Calculate your country's current account balance for the two years from the data you have collected and compare it to the value shown at the World Bank website. Are the two values the same? If not, have YOU made an error or is it them?
e Briefly explain what the current account balance value for your country means. Is your country spending more foreign exchange than it is earning or is it earning more than it is spending?
f From the current account balance, do you expect your country to be a net borrower of foreign exchange from the ROW? Explain.
