1. A country exports $800 (all numbers in billions of dollars) and imports 720. Have they a trade deficit, balance or surplus?

2. By how much?

3. $400 in income, transfers and grants is paid out of this same economy while $300 is paid to it. Does it have a current account deficit, balance or surplus?

4. This current account deficit, balance or surplus is by how much?

5.Because of your #4 answer, does this economy have a capital account deficit, balance or surplus?

6. -and by how much?

7.Explain two advantages of a floating rate exchange regime.

8.Explain two disadvantages of a floating rate exchange regime.

9.Explain two advantages of a fixed rate exchange regime.

10.Explain two disadvantages of a fixed rate exchange regime.