A. Using the classic BPM5 conventions set up the main BOP accounts (e.g., Current Account, Financial Account, etc.) and sub-accounts (e.g., investment income, net), then sign and classify the above transactions under their appropriate heading.

B. Calculate: (i) the merchandise trade balance, (ii) the current account balance, (iii) the balance of payments, (iv) this years change in net foreign assets, (v) statistical discrepancy or errors and omissions balance.

C. Suppose that it is estimated that U.S. residents surreptitiously laundered an estimated $5 billion abroad (say to evade U.S. taxes). This cash flow went unrecorded, but it may be safely assumed that the $5 billion was ultimately spent by the foreigners who received it on U.S. goods, services, and assets If the laundered amounts had been visible and properly recorded, what would be the new errors and omissions balance for the year?

D. In addition to the flows in (C) above, suppose that U.S. residents consumed $9 billion worth of illegal drugs imported from various sources abroad. If this transaction were visible and properly recorded, what would then be the amount of the statistical discrepancy or errors and omissions balance? (Again assume that the $9 billion received by foreigners for illegal drugs was spent legally over the year on U.S. goods, services, and assets.)

data st part complete SS-bor Data are BITI Goods: exports 504.548 Goods: imports 668.868 Domestic acquisition of foreign firms 49.37 Investment in new plant and equipment by foreign firms in U.S.A 49.44 Net U.S. purchases of foreign equities, portfolio purposes 42.688 U.S. purchases of foreign corporate bonds ..7.12 Sale of U.S. T-Bills to foreign banks 101.368 Sales of corporate debt instruments by U.S. firms 39.25 Direct reinvestment by U.S. residents of profits earned from foreign 17.04. direct investment into new equity shares of the same foreign enterprises (the amount here is the value of the new equity shares) Trade credits issued to foreign firms 1.34 Increase in value of deposits held by foreigners in U.S. banks 87.96 Transportation services provided by U.S. firms 2.49 Travel expenditures of U.S. residents 44.50 Financial, insurance, construction, and other fees received by U.S. - 15.600 Sale of patents by U.S. biotech companies -16.778 Tourist revenues received by U.S.A - 68.688 Foreign guest workers' remittances -35.164 Forgiveness of foreign debt 0.60 Federal Reserve sales of foreign currency 5.518 Dividend and interest revenue received by U.S.A 45.08 Payments to foreign workers in the U.S.A 1.22 Bond, equity, and money market income paid to foreign investors 54.358 data st part complete SS-bor Data are BITI Goods: exports 504.548 Goods: imports 668.868 Domestic acquisition of foreign firms 49.37 Investment in new plant and equipment by foreign firms in U.S.A 49.44 Net U.S. purchases of foreign equities, portfolio purposes 42.688 U.S. purchases of foreign corporate bonds ..7.12 Sale of U.S. T-Bills to foreign banks 101.368 Sales of corporate debt instruments by U.S. firms 39.25 Direct reinvestment by U.S. residents of profits earned from foreign 17.04. direct investment into new equity shares of the same foreign enterprises (the amount here is the value of the new equity shares) Trade credits issued to foreign firms 1.34 Increase in value of deposits held by foreigners in U.S. banks 87.96 Transportation services provided by U.S. firms 2.49 Travel expenditures of U.S. residents 44.50 Financial, insurance, construction, and other fees received by U.S. - 15.600 Sale of patents by U.S. biotech companies -16.778 Tourist revenues received by U.S.A - 68.688 Foreign guest workers' remittances -35.164 Forgiveness of foreign debt 0.60 Federal Reserve sales of foreign currency 5.518 Dividend and interest revenue received by U.S.A 45.08 Payments to foreign workers in the U.S.A 1.22 Bond, equity, and money market income paid to foreign investors 54.358