Can you help me with the following question?
1. Classify each of the following as debits or credits in the U.S. balance of payments.
a. Americans buy chocolate from the Swiss.
b. U.S. gives foreign aid to Bosnia.
c. British investors purchase U.S. government bonds
d. American tourists travel to Australia
e. Toyota builds a new plant in Ohio.
2. What will happen to a country that fixes the price of foreign exchange below equilibrium?
3. What factors will shift the supply and demand for currency?
4. What are the three categories of transactions in the balance of payments? Give an example of each.
5. Economists sometimes say that the current exchange rate system is a dirty float system. What does this mean?
6. What are the main arguments presented against flexible exchange rates?