I am having trouble with my balance of payments for my economics class. I am confused on one of the practice problems. This is my answer...I am uncertain about several parts. I wrote questions next to some of my answers (of course if you see any other problems please point them out to me!). I am really confused on e and f, but I gave it my best guess.

1a)

Credit: Category I, Export of goods, +6000

Debit: Category III, decrease in foreign short term private assets in country A, -6000

1b) This one is a gift, but it is made by writing checks...is my credit correct??

Debit: Category I, Unilateral transfers made, -1000

Credit: category III, decrease in short term assets abroad +1000

1c)

Debit: Category I, Imports -8000

Credit: Category III, increase in foreign short-term private assets in A +8000

1d)

Credit: Category II, Increase in foreign long-term private assets in A +5000

Debit: Category III, Decrease in foreign short term private assets in A -5000

1e) It seems like private assets abroad are decreasing...but am I right to put it as a credit???

1- Suppose that home country A has the following transactions with foreign countries (represented by foreign country B). For each transaction, indicate and explain the appropriate debit and credit entry in A's balance-ofpayments accounts. (a) A firm in country A sells $6,000 of steel to a country B firm. Payment is made by the rm in B drawing down its checking account in a country A commercial bank. (b) Country A citizens give $1,000-worth of cash to country B relatives by writing checks on Acitizen bank accounts in country B. (c) An importer in country A buys $8,000 of apparel from a country-B supplier, paying for the goods by writing a check to be deposited into the B finn's bank account in a country A bank. (d) A citizen of country B buys a long-term bond of a company in country A. The buyer purchases the $5,000 bond by drawing down hisJ'her checking deposit in a bank in A. (e) A rm in country A purchases $3,000 of shipping services from a country B ocean freight carrier, paying for the services by drawing down bank deposits in B owned by the A rm. (f) A's central bank buys $2,000-worth of foreign currency holdings held in a B commercial bank by an A citizen. The central bank adds the foreign currency to its own commercial bank account in country B