QUESTION1:

1. Briefly explain and showin the table below how each of the following transactions would be entered in theSpanish balance of payments. Note that allthe amounts in theSpanish balance of payments are recorded in euros.
2. Tourists from Germany spend 3,000,000 euros on vacation in Spain. They pay with checks on their banks in Germany.answ:This is credit since there is an inflow of Spanish balance to the country. It is also current due topertains to transactions of goods and services during vacation.

1. Zara US Inc. (a Spanish company operating the US) pays a dividend of US$2,000,000 to its shareholders in Spain. Zara US Inc. converts the US$ for euros at the central bank of Spain(assume that the dollar/euro exchange rate is US$2/).answ: This is debit since there is an outflow of Spanish balancefrom the country and it is capital since it involves the central bank of Spain.

1. Beyonce (a US singer) is paid 600,000 euros for a concert in Madrid (Spain). Beyonce wants to hold US$ instead of euros, so she exchanges 600,000 euros for US$ at the central bank of Spain(assume that the dollar/euro exchange rate is US$2/). answ: This is credit since there is inflow of Spanish balance to the country and it isfinancialsinceit. Involvesfinancialinstrumentswith the central bank of Spain.

Please answer to the questions attached in JPG. A and B. The text above is the part one of the question that I already solved.

Spanish Balance of Payments (in euros) CREDIT (+) DEBIT (-) Current Account 3,000,000 Capital Account 1,000,000 Financial Account 600,000 a) Based on the previous entries in the Spanish balance of payments, calculate: [Hint: Recall that Current Account + Capital Account + Financial Account + Statistical Discrepancy (if any) = 0] i. The current account balance and The financial account balance. ii. The capital account balance. iii. Statistical Discrepancy. iv. The official settlements balance b) Provide a brief interpretation of the official settlements balance calculated in question b.v