You have been appointed policy advisor of the country Economia. The country is an open economy, has a floating exchange rate regime and uses the Econ as its currency.

The government is unsure how to record some international transactions in the Balance of Payment. Show (using the credit/debit tables) how each of the following transactions should be recorded in Economias Balance of Payments.

You should specify the account that is affected and the accompanying credit/debit entry.

a. A company in Economia buys a patent from a German company for 1 million Econs.

b. A French worker living and working in Economia sends 500 Econs worth of Economias wine to his family in France.

c. A foreign lender forgives 1 million Econs worth of Economias debt.

d. A German engineer receives 1,000 Econs for services provided to a company in Economia.