Answer :
Certainly! Let's go through the information step-by-step to answer each of the questions.
### i. Calculate the value of total visible exports.
The total visible exports are given directly in the table. Therefore, the value of total visible exports is:
[tex]\[ \text{Total visible exports} = 200 \text{ million Kina} \][/tex]
### ii. Calculate the value of invisible balance.
To find the invisible balance, we must calculate the sum of all invisible earnings and subtract the sum of all invisible expenditures.
- Invisible earnings include:
- Repayment of loan: 25 million Kina
- Shipping earnings: 20 million Kina
- Tourists earnings: 25 million Kina
So, the total invisible earnings are:
[tex]\[ \text{Invisible earnings} = 25 + 20 + 25 = 70 \text{ million Kina} \][/tex]
- Invisible expenditures include:
- Interest paid overseas: 20 million Kina
- Invisible imports: 100 million Kina
So, the total invisible expenditures are:
[tex]\[ \text{Invisible expenditures} = 20 + 100 = 120 \text{ million Kina} \][/tex]
Now, we calculate the invisible balance:
[tex]\[ \text{Invisible balance} = \text{Invisible earnings} - \text{Invisible expenditures} = 70 - 120 = -50 \text{ million Kina} \][/tex]
### iii. Calculate the balance on current account.
To calculate the balance on the current account, we need to consider both visible and invisible transactions.
- Current account earnings include:
- Total visible exports: 200 million Kina
- Export of raw material: 50 million Kina
- Invisible earnings: 70 million Kina (as calculated before)
So, the total current account earnings are:
[tex]\[ \text{Current account earnings} = 200 + 50 + 70 = 320 \text{ million Kina} \][/tex]
- Current account expenditures include:
- Visible imports: 150 million Kina
- Import of raw material: 75 million Kina
- Invisible expenditures: 120 million Kina (as calculated before)
So, the total current account expenditures are:
[tex]\[ \text{Current account expenditures} = 150 + 75 + 120 = 345 \text{ million Kina} \][/tex]
Now, we calculate the balance on the current account:
[tex]\[ \text{Balance on current account} = \text{Current account earnings} - \text{Current account expenditures} = 320 - 345 = -25 \text{ million Kina} \][/tex]
### iv. Calculate the overall balance of payment.
The overall balance of payment typically includes the balance on the current account along with capital account and financial account. However, if we are only considering the provided data for simplicity, we proceed with the balance on current account as the overall balance.
Thus, the overall balance of payment is:
[tex]\[ \text{Overall balance of payment} = \text{Balance on current account} = -25 \text{ million Kina} \][/tex]
### Summary of answers:
1. Total visible exports: 200 million Kina
2. Invisible balance: -50 million Kina
3. Balance on current account: -25 million Kina
4. Overall balance of payment: -25 million Kina
### i. Calculate the value of total visible exports.
The total visible exports are given directly in the table. Therefore, the value of total visible exports is:
[tex]\[ \text{Total visible exports} = 200 \text{ million Kina} \][/tex]
### ii. Calculate the value of invisible balance.
To find the invisible balance, we must calculate the sum of all invisible earnings and subtract the sum of all invisible expenditures.
- Invisible earnings include:
- Repayment of loan: 25 million Kina
- Shipping earnings: 20 million Kina
- Tourists earnings: 25 million Kina
So, the total invisible earnings are:
[tex]\[ \text{Invisible earnings} = 25 + 20 + 25 = 70 \text{ million Kina} \][/tex]
- Invisible expenditures include:
- Interest paid overseas: 20 million Kina
- Invisible imports: 100 million Kina
So, the total invisible expenditures are:
[tex]\[ \text{Invisible expenditures} = 20 + 100 = 120 \text{ million Kina} \][/tex]
Now, we calculate the invisible balance:
[tex]\[ \text{Invisible balance} = \text{Invisible earnings} - \text{Invisible expenditures} = 70 - 120 = -50 \text{ million Kina} \][/tex]
### iii. Calculate the balance on current account.
To calculate the balance on the current account, we need to consider both visible and invisible transactions.
- Current account earnings include:
- Total visible exports: 200 million Kina
- Export of raw material: 50 million Kina
- Invisible earnings: 70 million Kina (as calculated before)
So, the total current account earnings are:
[tex]\[ \text{Current account earnings} = 200 + 50 + 70 = 320 \text{ million Kina} \][/tex]
- Current account expenditures include:
- Visible imports: 150 million Kina
- Import of raw material: 75 million Kina
- Invisible expenditures: 120 million Kina (as calculated before)
So, the total current account expenditures are:
[tex]\[ \text{Current account expenditures} = 150 + 75 + 120 = 345 \text{ million Kina} \][/tex]
Now, we calculate the balance on the current account:
[tex]\[ \text{Balance on current account} = \text{Current account earnings} - \text{Current account expenditures} = 320 - 345 = -25 \text{ million Kina} \][/tex]
### iv. Calculate the overall balance of payment.
The overall balance of payment typically includes the balance on the current account along with capital account and financial account. However, if we are only considering the provided data for simplicity, we proceed with the balance on current account as the overall balance.
Thus, the overall balance of payment is:
[tex]\[ \text{Overall balance of payment} = \text{Balance on current account} = -25 \text{ million Kina} \][/tex]
### Summary of answers:
1. Total visible exports: 200 million Kina
2. Invisible balance: -50 million Kina
3. Balance on current account: -25 million Kina
4. Overall balance of payment: -25 million Kina
