Paf is a small country. Its currency is the pif, and the exchange rate with the U.S. dollar is 0.9 pifs per dollar. Here are some transactions affecting paf's balance of payments during the quarter.

1. Paf exports 10 million pifs of local products.

2. Paf investors buy foreign companies for a total cost of $3 million.

3. Paf investors receive $0.1 million of dividends on their foreign shares.

4. Many tourists visit Paf and spend $0.5 million.

5, Paf pays 1 million pifs as interest on paf bonds currently held by foreigners.

6. Paf imports $7 million of foreign goods.

7. Paf receives $0.3 million as foregin aid.

a. What is Paf's balance of payments for the quarter?

b. How are official reserve affected?