Question $3$

If the exchange rate goes from $$1\mathrm{.}08$ per CHF to $$0\mathrm{.}98$ per CHF$,$ then the net cash flows $($profit$)$ of a US based firm which primarily imports its raw material from Switzerland will:

$$ decrease

$$ not change much

$$ Increase

Question $4$

In the US Balance of Payments accounts, a sale of Japanese bonds held by the US treasury should be treated as a:

debit to official reserve account

debit to capital account

credit to capital account

credit to official reserve account

Question $5$

If the US trade deficit with Japan increases, the most likely impact of this will be to:

$$ Decrease the Japanese share in the US treasury market

Increase the Japanese share in the US treasury market.