Q. Consider econ of Opulenza. In Opulenza domestic investment was 400 milion and re was 20 million in capital gains or domestic wealth during 2007. Opulenzas purchased 120 million in new foreign assets during year; Foreigners purchases 160 million in Opulenza assets. Assume valuation effect total 1 million in capital gains or external wealth.

a) Compute change in domestic wealth in Opulenza

b) Compute change in external wealth for Opulenza

c) Compute change in total wealth

d) Compute domestic savings current account

e) Compute Opulenzas current account. Is CA a deficit or a surplus?

f) Explain intuition for C4 deficit/ surplus in terms of savings in Opulenza, financial flows and its domestic/external wealth position.