practice problems1 - $8 p Remittance of dividends to...

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Practice problems 1 Below is a roaster of transactions for the mythical economy of Fredonia. Use this roster of transactions to complete the balance of payments charts which follows (all transactions are in millions of Fredonian dollars). Description a) Sale of stock in the Freedonian Balloon Company to US investors $8 b) Payment of dividends to Italian shareholders in Freedonia Balloon Co. $9 c) Purchase of British Tea Sets $5 d) Purchase of American cowboy hats $8 e) Sale of Freedonian cigars to Belgium $3 f) Sale of Freedonia’s largest hotel to Japanese investors $14 g) Purchase of IBM stock by several Fredonian investors $10 h) Sale of Freedonian harps to Switzerland $22 i) Purchase of Canadian hockey sticks $5 j) Rental of rooms by German tourists in Freedonia $3 k) Sale of Freedonian croquet mallets to Great Britain $11 l) Purchases of French Francs by Freedonian Central Bank $18 m) Foreign aid to Freedonia from Bolivia $5 n) Purchases of beef from Argentina $4 o) Sale of Freedonian dollars in the US federal Reserve
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Unformatted text preview: $8 p) Remittance of dividends to Fredonian shareholders of Chrysler stock $3 q) Purchase of cars from Yugoslavia $12 r) Sale of socks to Australia $6 s) Sale of a large Freedonian farm to a British citizen $2 t) Purchase of restaurant meals in Israel by Freedonian tourists $1 u) Fredonian foreign aid to Mongolia $1 The Fredonian Balance of Payments Account (millions of Fredonia dollars) Current Account 1. Exports $48 Of which 2. Merchandise e+h+j+k+r 3. Investment Income received p 4. Imports-$44 Of which 5. Merchandise c+d+i+n+q+t 6. Investment Income paid b 7. Net Unilateral transfers m-u 8. Balance on Current Account $8 Financial Account 9. Fredonian Assets held abroad (increase - )-$28 Of which: 10. Official Reserve assets l 11. Other assets g 12. Foreign Assets held in Fredonia (increase + ) $32 Of which: 13. Official Reserve assets o 14. Other assets a+f+s 15. Balance on Financial Account $4 16. Statistical Discrepancy-$12...
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practice problems1 - $8 p Remittance of dividends to...

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