According to balance of payment (BoP) of 2019 for a small open economy, giventhat:

EX = 2880

IM = 3120 Capital Account = 160

What is the amount of Financial Account in this economy when BoP is balanced and free of omissions or errors?

(18pts) Now, explain how, if at all, each of the following transactions (b)-(f) generates two entries (a credit and a debit) in the American balance of payments accounts, and describe how each entry would be classified in any of current, financial or capital account.

u You need to write your answer following the format of the below example: Example: An American buys an ink-jet fax machine from the Italian company

Olivetti and pay for your purchase with a check.

Answer for example:

Fax machine purchase: U.S. good import - debit in the current account;

Sale of bank deposit by Citibank: U.S. asset sale - credit in the financial account.

(b) A U.S. resident buys shares of a Chinese company paying via wire transfer from her Wells Fargo account to a Chinese bank.

(c) An Australian tourist rents a car in the U.S. and pays with her credit card.

(d) A U.S.-owned factory in Britain uses local earnings to buy additional machinery.

(e) U.S. banks forgive (that is, announce that they will simply forget about) in

debt owed to them by the government of the imaginary country of Syria.

(f) A U.S. resident receive dividend from Japanese stock he/she owns. The dividend is deposited in a Japanese bank.