ECON
1A Homework Problems.doc

# V official reserve transactions balance c if the

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(v) official reserve transactions balance (c ) If the country's International Investment Position was +\$200 before this activity, what was it after? 1.3. Make the following entries in the US’s BOP accounts: (a) the domestic (US) central bank buys \$50 worth of yen in the foreign exchange markets. (b) a domestic company, instead of issuing dividends in money to its stockholders, gives them shares of the company’s stock instead and, because of this, a British stockholder is given \$40 worth of stock. (c) a domestic shipping company is paid \$15 dollars by Korean producer. (d) Japanese Firm sells Los Angeles hotel to British investor for \$40 / pays w/NY bank check 1.4. Generate the BOP t-accounts that we have used in this class, and then record the following transactions. Assume that all transactions are financed by checks written on foreign banks. (a) A German receives a \$100 dividend from a US firm (b) An American buys \$200 worth of a French stock from a Frenchman. (c) An American buys \$300 worth of American stock from a Frenchman (d) The Fed buys \$400 worth of euros in the foreign exchange markets (e) An American trades \$500 worth of legal services to a Canadian for software programming

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1.5. In the question above, what is the: (a) CA (b) KFA (c) basic balance (d) official reserve transactions balance (e) trade balance 1.6. Generate the SIX BOP t-accounts that we’ve used in this class and make the appropriate entries for the following transactions. Assume that all transactions are financed by checks written
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