Information for the economy of Pogo

2019

• Interest payments received from Foreign on Foreign assets owned by Pogo: $45M
• Interest payments paid to Foreign citizens on Pogo assets owned by Foreign: $48M
• Federal Reserve Bank of Pogos holding of interest-free Foreign assets, start of 2019: $85M

2020

• Interest payments received from Foreign on Foreign assets owned by Pogo: $46M
• Interest payments paid to Foreign citizens on Pogo assets owned by Foreign: $52M
• Federal Reserve Bank of Pogos holding of interest-free Foreign assets, start of 2020: $77M

Assumptions:

• Interest rate on Foreign assets is 5% and the Interest rate on Pogo assets is 8% for both 2019 & 2020.
• Foreign central bank does not hold Pogo assets
• There are no Foreigners working in Pogo and no Pogo citizens working in Foreign during these years.

Questions:

1. What is Pogos international net worth at the start of 2019? Show your work.

2. What is Pogos current account, CA, in 2019. Show your work.

3. What is Pogos trade account, TA, in 2019. Show your work.

4. What is Pogos international net worth at the start of 2020? Show your work.