QUESTION 3 Transactions between Spain and the rest of the world are shown below.

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QUESTION 3 Transactions between Spain and the rest of the world are shown below. Use the following information to answer the next four questions A. Spanish citizens purchase 20 million worth of US issued stocks B. FFF (Spanish firm) pays 15 million for commercial property in Canada C. Foreign tourists spend 30 million while visiting Spain D. The Spanish government sells 4 million worth of treasury securities to foreign nations E. Spanish citizens receive 2 million in dividends from overseas investments F. The Spanish government buys 13 million worth of gold G. A Spanish firm sells 25 million worth of computer components to a British company H. Spain sends 1 million in aid to El Salvador I. A US-based company sells 12 million worth of steel to a Spanish company. Find Spain's balance of trade. Enter your final answer in terms of millions of euros (EX: 12,000,000 would be entered as 12). Do not enter a non-numerical value when inputting your answer. QUESTION 4 Find the capital account balance (in terms of millions of euros). O -44 O -35 O -31 O -39 None of the above QUESTION 5

Explanation / Answer

Answer:

Balance of trade :

Purchase of US issued stocks = (€ 20 million)

Spanish firm payment to canada = (€ 15 million)

Foreign currency received by visitings = € 30 millions

Spanish government sells treasury secusecurit = € 4 millions

Received dividend from overseas investments = € 2 millions

Spanish government buys gold worth = (€ 13 millions)

Spanish firm sells computers to british company = € 25 million

Spain sends aid to EI salvador = (€ 1 million)

Buys steel from US based comlany = (€ 12 millions )

Balance of trade = zero. (all the receivables and all the payments are equal ) .

Capital account balance :

Option c is the answer.

= - 20 - 15 + 4 - 131+ 25 - 12

= - 31

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