Show using Balance of Payments credits (+) and Debits (-) how each of the following transactions would affect the Canadian Balance of Payment (BOP). Indicate which accounts CA, FA, or KA the credits/debits appear.
(a) An American firm buys 10 million CAD worth of auto parts from a Canadian firm. The American firm pays the Canadian firm by writing a cheque drawn on its U.S bank for the USD equivalent amount of 10 million CAD.
(b) A Canadian investor buys U.S government bonds from a U.S. bond dealer for 50 million CAD paying for the bond by transferring 50 million CAD from the investor's bank account to the U.S. dealer.
(c) What has happened to Canada's Net Foreign Wealth (NFW) as a result of these two transactions? Briefly explain.