How would the transaction in 4) be reflected in the balance of payments (BOP)?

(10 points) Consider economies of the U.S., China, and Germany in a certain year. Assume that during that year exchange rate did not fluctuate, so that one euro bought exactly one dollar. Next, suppose that the following transactions take place in that year and illustrate them using the table below. Feel free to modify the table as needed. I encourage you to explain your reasoning for each transaction. 4) Because Germany has a preference to euro-denominated assets, it engages in a spot dollar-euro transaction with China. GER USA BOP = CHN BOP= CuA+ Fin A + CaA CuA+ FinA + CaA BOP = CuA+ FinA + CaA 1 2 3 4 5 6 7 8 9 (10 points) Consider economies of the U.S., China, and Germany in a certain year. Assume that during that year exchange rate did not fluctuate, so that one euro bought exactly one dollar. Next, suppose that the following transactions take place in that year and illustrate them using the table below. Feel free to modify the table as needed. I encourage you to explain your reasoning for each transaction. 4) Because Germany has a preference to euro-denominated assets, it engages in a spot dollar-euro transaction with China. GER USA BOP = CHN BOP= CuA+ Fin A + CaA CuA+ FinA + CaA BOP = CuA+ FinA + CaA 1 2 3 4 5 6 7 8 9