Balance of Payments: Services Balance Adjusted for Net Errors and Omissions

Steps:

• Identify services exports and imports from the current account data.
• Calculate services balance as exports minus imports (e.g., 4000 - 5000 = -1000).
• Add net errors and omissions, which is a balancing item (given as 0 in this case).
• The resulting value is -1000 NZ$.

Why C is correct:

• The services balance formula (exports - imports) directly yields -1000, with net errors and omissions at zero per balance of payments accounting standards.

Why the others are wrong:

• A: Overstates the deficit by including unrelated capital flows.
• B: Miscalculates by ignoring half the import value.
• D: Confuses with a surplus from goods balance, not services.

Final answer: C