1) Classify each of the following as debits or credits in the U.S. balance of payments.

Americans buy chocolate from the Swiss.

U.S. gives foreign aid to Bosnia.

British investors purchase U.S. government bonds

American tourists travel to Australia

Volkswagen earns profits in the United States from its new cars

Toyota builds a new plant in Ohio

Capital Records sells rock and roll music in Sweden

3. What will happen to a country that fixes the price of foreign exchange below equilibrium?

4. What factors will shift the supply and demand for currency?

5. What are the three categories of transactions in the balance of payments? Give an example of each.

6. Economists sometimes say that the current exchange rate system is a dirty float system. What does this mean?

7. What are the main arguments presented against flexible exchange rates?

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Related Questions

	Americans buy chocolate from the Swiss. U.S. gives foreign aid to Bosnia. British investors purchase U.S. government bonds American tourists travel to Australia Volkswagen earns profits in the United States from its new cars Toyota builds a new plant in Ohio Capital Records sells rock and roll music in Sweden