Keep in mind Table Q19.9 listing the effects of individual transactions on the balance of payments. Indicate the plus entry and the minus entry for the following transactions. For example, the country exports goods in the amount of $1,000 paid for by the importer by a check on a foreign bank. The entry would be
P1$1,000................M3 $1,000
Table Q19.9 Effects on the Balance of Payments, Country A
Plus (P).............................................Minus (M)
1. Exports and income receipts................. 1. Imports and income payments
2. Increase in liabilities to foreigners.......... 2. Decrease liabilities to foreigners
3. Decrease claims on foreigners ............... 3. Increase claims on foreigners
3a. Decrease investments........................3a. Increase Investments
3b. Sell assets..................................... 3b. Buy assets
(a) Country A exports $10,000 of goods to country I paid for by the exporter by a check on his account with a bank in country A.
(b) Country A imports $5,000 worth of merchandise paid for by a check on a bank in country A.
(c) Direct investment income of $2,000 was received by a firm in country A from a foreign subsidiary, which paid by drawing a check on a bank in its own country F.
(d) A multinational firm domiciled in country A made an investment of $1 million on a direct basis to establish a foreign subsidiary in country G. Payment was made by drawing on its bank account in country A.
(e) A citizen of country A made a gift of $3,000 to a friend in a foreign country who deposited the check drawn on a bank in country A in his own bank in country M.
(f) A citizen in country A bought an airline ticket to Europe that he purchased from Lufthansa Airlines by a check for $500 drawn on a bank in country A?