A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency. (a) Find the co
NIIP and national wealth
A country has $35 worth of factories with foreign owners. The country's nationals own $100 of wealth, of which only 52 is invested domestically. The country's treasury is holding $8 of reserves of foreign currency. Foreigners own $15 of the country's firms' stock. Foreigners hold no deposits nor other in the country. They have zero reserves of the country's currency.
(a) Find the country's NIIP
(b) The
(c) By the end of the year (January 1 next year), the country has $48 worth of claims on foreign assets (including the $8 in the treasury) and foreigners have $55 of claims on the country's assets. There were no valuation effects. Find the country's current account.
(d) In (c), nothing changes for the home claims on foreigners. The foreign FDI decreased by 2, foreign portfolio holdings in the country decreased by 1, and nothing happened to foreign reserves of the country's currency. Compose the country's financial account.
Answers. (a) -2 (b) +1 (c) -5 (d) -2, -1, +8, 0
I need assistance answering questions c and d, and the answers are provided.
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