Table 1
below gives information on the Balance of Payments of Country Z. Referring to the table below, what is the value of net primary income? Table 1[Fill in the blank]

Question

BlackTom AI · Accepted Answer

Begin by restating the given data in a clear way to set up the calculation: the table lists Net goods = -89, Net services = 5, Net primary income = ?, Net secondary income = -15, and Balance on current account = -132. 
Option A: a. -33
Option B: b. -74
Option C: c. -81
Option D: d. 67

To determine Net primary income, use the standard BOP accounting identity for the current account: Balance on current account = Net goods + Net services + Net primary income + Net secondary income.

Compute the known sums first: Net goods (-89) plus Net services (5) equals -84. Then add Net secondary income (-15): -84 + (-15) = -99. So the equation becomes -132 = -99 + Net primary income.

Solve for Net primary income: Net primary income = -132 - (-99) = -132 + 99 = -33.

Now evaluate each option:
- Option a (-33): When Net primary income = -33, the sum becomes -99 + (-33) = -132, which matches the Balance on current account exactly. This is consistent with the table data.
- Option b (-74): If Net primary income were -74, the total would be -99 + (-74) = -173, which does not equal the given -132. This would violate the balance equation.
- Option c (-81): If Net primary income were -81, the total would be -99 + (-81) = -180, again not matching -132. This is incorrect.
- Option d (67): If Net primary income were 67, the total would be -99 + 67 = -32, far from -132. This option clearly fails the balance condition.

Thus, the only value that satisfies the balance of payments identity with the given components is -33, corresponding to option a. The other choices break the fundamental accounting relation by producing a current account balance different from -132.

In summary, the correct calculation hinges on applying Balance on current account = Net goods + Net services + Net primary income + Net secondary income and solving for Net primary income. The result is -33, which aligns with option a.

Table 1 below gives information on the Balance of Payments of Country Z. Referring to the table below, what is the value of net primary income? Table 1[Fill in the blank]

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