Question

Country A’s sale of Government Bonds to foreigners 400 Payment of interest on Country A’s Government bonds owned by Country A’s residents 200 Payment of interest on Country A’s Government bonds owned by foreigners 500 Donation by Country C’s residents to a Country A’s charity organization 100 Donation by Country A’s residents to a Country A’s charity organization 2000 Dividends paid by Country B’s firm to Country B’s residents 4000 Country A’s exports of cars to Country B	300
Country A’s imports of cars to Country B	500
Country A workers’ wages paid by a domestic firm on Country A’s soil	1000
Country A workers’ wages paid by a foreign firm abroad	500
Country A’s Central Bank Purchase of Stocks from the United States	2000
Country A’s sale of Government Bonds to Country A’s residents	1000
Donation by Country A’s residents to a foreign charity organization	400

1. Which of these transactions are part of the balance of payments?

2. Which one enters with a + sign?

3. Which one enters with a - sign?

4. Which of these are current account transactions?

5. Which of these are financial account transactions?

6. What is the current account balance?

7. What is the trade balance?

8. Suppose that the net international investment position at the beginning of 2017 is 0. What is the net international investment position at the end of 2017 (at accounting value)?

Answer 1