Question

China had a $214 billion overall current account surplus in 2012. Assuming that China’s net debt forgiveness was zero in 2012 (its capital account balance was zero), what was the net balance of Chinna's financial account balance?
Instructions: Enter your answer as a whole number. If you are entering a negative number be sure to include a negative sign (-) in front of that number.

$ ________ billion.

Answer 1

Answer:

The correct asnwer is $-214 billion.

Explanation:

A surplus occurs when an account exceeds the credit after having paid all its debts and obligations.

As the example says, assuming that China’s net debt forgiveness was zero in 2012, then the net balance of China's financial account balance would be -214 billion.

This means that China would be facing a deficit.

A defit means that more money comes out of our company's account than it enters.

Which causes China to have a negative balance account.