What effect will each of the following events have on the current account balance and the exchange rate if the exchange rate is fixed? if the exchange rate is floating?

a. The U.S. government cuts taxes and income rises.

b. The U.S. inflation rate increases, and prices in the United States rise faster than those in countries with which the United States trades.

c. The United States adopts an expansionary monetary policy.

Interest rates fall (and are now lower than those in other countries) and income rises.

d. The textile companies’ “Buy American” campaign is successful, and U.S. consumers switch from purchasing imported products to buying products made in the United States.