1. Consider the case of a balance-of-trade deficit in the United States, along with a floating exchange rate.

During a balance-of-trade deficit, net financial (outflows or inflows) may be enough to offset net international trade flows, preventing the US dollar from (strengthening or weakening) and preventing exchange rate changes from (correcting or exaggerating) the problem.

2. Suppose that the United States imposes tariffs on cars imported from Japan, and in retaliation, Japan imposes tariffs on cars imported from the United States.

The tariff on Japanese cars will likely have a (positive or negative) effect on US auto producers. The tariff on American cars by japan will have a (positive or negative) effect on US auto producers. The net effect of these policies together for the US auto producers would be (ambiguous/positive/negative)