1.Mercantilism and Comparative Advantage are trade theories. Mercantilism is called a "zero sum game" and is said to "beggar thy neighbor" meaning to make your neighbor poorer. Comparative Advantage is a "win-win" or "plus sum game" to benefit all parties. Access outside resources and comment on these two trade theories. When were they first used and how are they used today?  

2.The Balance of Payments records funds leaving and entering a country. I will categorize the funds into three sections: Current Account (basically trade - imports and exports), Capital/Finance Account (investments - Portfolio Investments and Foreign Direct Investments), and the Official Reserve Account (Central Bank involvement with the currency exchange market). NOTE: The textbook distinguishes between the Capital Account and the Financial Account, but I put them both together.

For the United States what is the impact of the trade deficit on the flow of funds in the Current Account, and the subsequent affect on the funds flow of the Capital/Finance Account? In the long run how are United States assets affected? (Hint: think exchange rates and international investments)