1 Explain the following causes of an imbalance in the Bop.(p.158) 1.1 Change in money supply or repo rate 1.2 Change in aggregate expenditure 1.3 Change in Exports Question 2 Discuss how Foreign Capital flows affect the economy . ( 10 / 16) ( p.155) QUESTION 3 Discuss the underlying factors that determine or cause sustained BoP tendencies. (pg 167) 3.1 Inflation differentials 3.2 International competitiveness 3.3 Political -economic expectations and perceptions QUESTION 4 Explain , with the aid of a diagram , the BoP adjustment process from a DEFICIT position. Refer to both the rigid and flexible exchange rates effects. (14/20) QUESTION 5 Explain , with the aid of a diagram , the BoP adjustment process from a SURPLUS position. Refer to both the rigid and flexible exchange rates effects. (14/20) QUESTION 6 Explain with the aid of a graph the internal and external effects of an increase in government expenditure ( see Fig 4.21 on page 201 in 4th Edition of prescribed textbook). 6.1 The process starting at point 0 (14/20)