Explain how each of the following transactions generate two entries- a credit and a debit- in the Canadian balance of payments account, and describe how each entry will be classified:

(i). During travel in France, a Canadian citizen buys a dinner in a French restaurant for $100 and pays with a visa credit card. [2.5 points]

(ii). A Canadian-owned factory in Britain used local earnings to buy additional machinery. [2.5 points]

(B). Assumed in a closed economy: Y= C + I + G C= a + b(Y - T) T= d + tY Where, Y = Output, I = Investment, G = Government expenditure, C = Consumption and T = Taxes

a, b, c and d >0

(i).What are the endogenous and exogenous variables in this model? [2.5 points]

(ii). What is the equilibrium value of Y? [2.5 points]