4. Critical analysis Q5 Suppose the exchange rate between the United States and Mexico freely fluctuates in the open market. Indicate whether each event in the following table would cause the dollar to appreciate, depreciate, or remain unchanged relative to the peso. No Event Appreciate Depreciate Change As a result of a Mexican oil discovery, Pemex, the Mexican oil company, increases the quantity of O O O drilling equipment it purchases in the United States. The United States increases its purchases of crude oil from Mexico as a result of the development of Mexican oil fields. Attractive investment opportunities in Mexico induce U.5. investors to buy stock in Mexican firms. 0 O O 5. Critical analysis Q7 True or False: Economies with sluggish growth often run trade surpluses. 0 True 0 False 7. Critical analysis Q11 Suppose foreigners lose confidence in the U.S. economy and therefore move to decrease their investments in the United States. Also suppose that the United States currently runs a current-account deficit. True or False: The change in the interest earned by foreigners on these investments would increase the current-account deficit. O True O False True or False: This decrease of foreign investments in the United States would increase demand for dollars and cause the dollar to appreciate. O True O False Grade It Now Save & Continue Continue without saving10. Critical analysis Q14 Several members of Congress have been highly critical of Japan and China because U.S. imports from these countries have persistently been substantially greater than our exports to them. True or False: Under a flexible exchange rate system, there is no reason to expect that the imports to and exports from a given country will be in balance. 0 True 0 False Japan is a major importer of resources like oil and a major exporter of high-tech manufacturing goods. The United States 7 a large amount of high-tech manufacturing goods and 7 very little oil. Thus, it is understandable that the Continue without saving United States persistently runs a trade '7 with Japan