Question

Consider two fictional economies, one called the domestic country and the other the foreign country. Given the transactions listed below, construct the balance of payments for each country. If necessary, include a statistical discrepancy. a. The domestic country purchased $120 in oil from the foreign country b. Foreign tourists spent $23 on domestic ski slopes. c. Foreign investors were paid $12 in dividends from their holdings of domestic equities d. Domestic residents gave $20 to foreign charities e. Domestic businesses borrowed $65 from foreign banks f. Foreign investors purchased $13 of domestic government bonds g. Domestic investors sold $59 of their holdings of foreign government bonds Domestic Country Balance of Payments ($) Current Account Exports Imports Trade balance Investment income received Investment income paid Net investment income Net transfers received Current account balance Capital Account Increase in foreign holdings of domestic assets Increase in domestic holdings of foreign assets Net increase in foreign holdings Statistical discrepancy