Question

consider the following events:

overseas telecommunication companies are paying 400,000 to US filmmakers for broadcasting tv shows

Morgan Stanley bought US treasury bills worth 1 billion

A Canadian liquor store LCBO sold ice vine worth 100,000, 30,000 of which was sold to US customers

A US telecom company bought patents from Nokia (Finland) for 1 million

Wells Fargo received 500,000 in dividends from overseas holdings

US government contributed 100,000 to the BIRD foundation sponsoring research at Tel Aviv University

A senior residing in New York moved to Orange County and brought the retirement savings worth 700,000

Credit Agricole, a major French bank, purchased shares of a US-based pharmaceutical company for 800,000

A. What is the net of the current account?

B. What is the net of the capital account?

C. What is the net of financial account?

D. What is the net balance of payments?

Answer 1

Answer Page: No o * Overseas telecommunication companies are paying 400,000 to os filmmakens for broadcasting TV shows. :: Jt is the current account (+$400,000) * Morgan sfantey bought us theastwy bills worth $1 billion, Morgan stanley is the us based company ....is not in balance of payment A us telecom company bought petenties from Nokia ( fioland) for 1 million. . It is the capital account (- $1000,000) * A Canadian liquor store LEBO sold lice vine worth $100,000 , $ 20,000 g which was sold to us customers ... It is the Cuvient account E$30,000) * coello fargo vreceived 500,000 in dividends from ovenscas holdings . 2Its Covent account ( + $500,000).

Page. No ® BIRD foundation * US government contributed Sponsoring research at Tel $100,000 to the Aviv oniversity . It is current account (- 4100,000) * A senior residing in news youth moved to the orange courting and brought the vebirement savings worth $ 700,000).. He is only changing states but is still in USA. Therebore, it is not in balance of payment . * Gredit Agricole ; a major french bank, purchased shares of aus- baved pharmaceutical company for $800,000 It is the financial account (+ $ 600,000) @telet the everyone account Net of the current account = 400,000. – 30,000 + 500,000 - 100,000 $470.000 Net of the Cevient account = $ 440,000

Page No ③ ® Nebe Southern capital account Net of the capital account = - $1000,000 det of financial account Net of financial account - +$800,000 i Nel balance of payments Het balance of payments = Net of current account + Het of the Capital account of Net of the financial account = 40,000 --- 1000,000 + 800,000 $540,000 :. Net balance of payments = + $540,000