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Problem 3. Balance of Payments. The table below is a summary of the balance of payments of Analog- Land. Item A. Current Account Goods: exports Goods: imports Balance on Goods Services: credit Services: debit Balance on Services Balance on Goods and Services Primary Income: credit Primary Income: debit Balance on Primary Income Balance on Goods, Services and Income Unilateral Transfers, net B. Capital Account, net C. Financial Account Direct Investment Assets Portfolio Assets Other Investment Assets Reserve Assets Net Acquisition of Financial (Foreign) Assets Direct Investment Liabilities Portfolio Liabilities Other Investment Liabilities Net Incurrence of Liabilities Financial Derivatives, net Statistical Discrepancy Value of Item -1000 5000 ??? -2000 3500 -2000 ??? ??? 100 -1200 -1100 -1600 600 400 ??? 0 150 1400 - 1200 350 400 350 250 1000 -100 -150 (a) Unfortunately the chief statistician spilled some coffee over the only paper copy in the country. The four missing entries are indicated with "???". Recover the missing entries. (Hint: Carefully read page 301 of Sawyer & Sprinkle where they explain that the item "Net Acquisition of Financial Assets" enters with opposite sign - similar to "Financial Derivatives, net") (b) The chief statistician is informed about the following events: (i) A citizen of Analog-Land sends 100 in remittances to a relative in Digital-Land. (ii) The central bank of Analog-Land buys government bonds of Digital-Land worth 200. (iii) A foreigner buys a share of the local PaperPencil corporation in Analog-Land worth 10. (iv) The Paper Pencil corporation buys the services of a consulting firm located in Digital-Land to develop some accounting software. Explain for each event into which category of the balance of payments the respective entry needs to be put (refer to the categories stated in the table). How is the current account, capital account or financial account affected

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