Question
You are provided with the following information about a country's international transactions during a given year (in millions): Service exports $346 Service imports $354 Merchandise
You are provided with the following information about a country's international transactions during a given year (in millions):
Service exports $346
Service imports $354
Merchandise exports $480
Merchandise imports $348
Income flows, net $153
Gift to foreigners $142
Increase in country's holding of foreign assets, net (excluding official reserves assets) $352
Increase in foreign holding of country's assets, net (excluding official reserves assets) $252
Statistical discrepancy, net credit $154
Calculate the official settlements balance and the current account balance. Is the country increasing or decreasing its net holdings of official reserve assets? Why?Show your calculations and reasoning!
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