1. An example of balance of payments accounting for Cascadial We will describe a series of transactions and assume that these are all the transactions that took place during the year so you can then use the data to construct the balance of payments for Cascadia (enter everything in $). Then you can also derive some of the intermediate balances. 1. A German airline, Lufthansa, ordered 5 Boeing planes for $1 million each and pays by drawing on their $ bank balances in London. 2. A Cascadian supermarket chain, QFC, buys 1,000 cases of French wine for $150 each and pays with a check in euros from the BNP (a French bank) where they have an account. 3. Seattle Toyota, a local car dealer, purchases 50 cars from the Japanese manufacturer for $30,000 each paying with a check in $ from the Rainier Bank in Seattle. 4. Windstar, a Seattle cruise line, sells 20 passages on a cruise to Alaska to a Swiss tourist bureau for $5,000 each. The Swiss tourist bureau pays with a check in Swiss Franc from UBS in Zurich. 5. Mr_Wong, a very rich Chinese donor, sends a check for one million dollar to the University of Washington in Seattle to build a new Chinese library. 6. Microsoft pays dividends amounting to $50,000 to a French citizen who deposits the $ check in a local account. 7. A Cascadian citizen buys stocks issued by Genetech (a Seattle pharmaceutical) for $1,000,000 and pays by drawing on his Rainier banking account. 8. Amazon pays $ 1 million for copyright fees to a Japanese electronic company drawing on 8. Amazon pays $ 1 million for copyright fees to a Japanese electronic company drawing on its yen accounts in a Tokyo Bank. 9. Amazon pays $50,000 (with a check from the Rainier Bank) to the Lloyd (a British insurance company) to insure an important shipment of electronic equipment to Houston. 10. A German citizen sells stocks of Volkswagen worth $15,000 to a Cascadian business partner who pays him with a check in Euro from the Deutsche Bank. 1 Cascadia is a utopian country using the dollar as its currency its capital is Seattle and its main companies are Boeing, Microsoft, Genetech and Amazon. Balance of Payments for Cascadia? (in 000) (specify the signs of all the balances) Current Account 1 Exports and income receipts (+) 2 Exports of goods and services 3 Goods 13 Services 26 Primary income receipts 33 Secondary income receipts 31 Imports and income payments (-) 345 Imports of goods and services 36 Goods 45 Services 58 Primary income payments 64 Secondary income payments 110 Balance of trade 111 Balance on merchandise trade (goods) 112 Balance on services 113 Balance on primary income 114 Balance on secondary income (net unilateral transfers) 109 Balance on current accounts Financial Account 67 US acquisition of financial assets, net (increase/financial outflow (-)3 68 Direct investment assets 71 Portfolio investment assets 76 Other investment assets (incl. Cascadia claims reported by Cascadian banks e.g. Foreign currency and deposits) 82 Reserve assets 91 US incurrence of liabilities, net (increase/financial inflow (+)) 92 Direct investment liabilities 95 Portfolio investment liabilities 2 There is no capital account 3 Note that with a debit account, an increase is a minus, so a decrease must be a plus 100 Other investment liabilities (incl. Cascadia liabilities reported by Cascadian banks e.g. US currency and deposits) 109 Balance on financial accounts 108 Statistical discrepancy 1. An example of balance of payments accounting for Cascadial We will describe a series of transactions and assume that these are all the transactions that took place during the year so you can then use the data to construct the balance of payments for Cascadia (enter everything in $). Then you can also derive some of the intermediate balances. 1. A German airline, Lufthansa, ordered 5 Boeing planes for $1 million each and pays by drawing on their $ bank balances in London. 2. A Cascadian supermarket chain, QFC, buys 1,000 cases of French wine for $150 each and pays with a check in euros from the BNP (a French bank) where they have an account. 3. Seattle Toyota, a local car dealer, purchases 50 cars from the Japanese manufacturer for $30,000 each paying with a check in $ from the Rainier Bank in Seattle. 4. Windstar, a Seattle cruise line, sells 20 passages on a cruise to Alaska to a Swiss tourist bureau for $5,000 each. The Swiss tourist bureau pays with a check in Swiss Franc from UBS in Zurich. 5. Mr_Wong, a very rich Chinese donor, sends a check for one million dollar to the University of Washington in Seattle to build a new Chinese library. 6. Microsoft pays dividends amounting to $50,000 to a French citizen who deposits the $ check in a local account. 7. A Cascadian citizen buys stocks issued by Genetech (a Seattle pharmaceutical) for $1,000,000 and pays by drawing on his Rainier banking account. 8. Amazon pays $ 1 million for copyright fees to a Japanese electronic company drawing on 8. Amazon pays $ 1 million for copyright fees to a Japanese electronic company drawing on its yen accounts in a Tokyo Bank. 9. Amazon pays $50,000 (with a check from the Rainier Bank) to the Lloyd (a British insurance company) to insure an important shipment of electronic equipment to Houston. 10. A German citizen sells stocks of Volkswagen worth $15,000 to a Cascadian business partner who pays him with a check in Euro from the Deutsche Bank. 1 Cascadia is a utopian country using the dollar as its currency its capital is Seattle and its main companies are Boeing, Microsoft, Genetech and Amazon. Balance of Payments for Cascadia? (in 000) (specify the signs of all the balances) Current Account 1 Exports and income receipts (+) 2 Exports of goods and services 3 Goods 13 Services 26 Primary income receipts 33 Secondary income receipts 31 Imports and income payments (-) 345 Imports of goods and services 36 Goods 45 Services 58 Primary income payments 64 Secondary income payments 110 Balance of trade 111 Balance on merchandise trade (goods) 112 Balance on services 113 Balance on primary income 114 Balance on secondary income (net unilateral transfers) 109 Balance on current accounts Financial Account 67 US acquisition of financial assets, net (increase/financial outflow (-)3 68 Direct investment assets 71 Portfolio investment assets 76 Other investment assets (incl. Cascadia claims reported by Cascadian banks e.g. Foreign currency and deposits) 82 Reserve assets 91 US incurrence of liabilities, net (increase/financial inflow (+)) 92 Direct investment liabilities 95 Portfolio investment liabilities 2 There is no capital account 3 Note that with a debit account, an increase is a minus, so a decrease must be a plus 100 Other investment liabilities (incl. Cascadia liabilities reported by Cascadian banks e.g. US currency and deposits) 109 Balance on financial accounts 108 Statistical discrepancy