solve 22 & 23

Assume that you, as an American, Want to buy UK bonds because the UK bonds have a higher interest rate. What do you need to also consider before you buy UK bonds. An example would be, suppose that USA bonds pay 3% and UK bonds pay 7%, then what do you need to consider before buying UK bonds the British pound will not appreciate by more than 4% B that the American dollar will not appreciate by more than 4% that the American dollar will not depreciate by more than 4% the nominal exchange rate will remain stable Question 23 We run up trade deficits with other countries when we buy physical goods from them (such as shirts or shoes) and they do not buy from us. Well, to run up a trade deficit, we must then sell what type of goods to counter our trade deficit? Financial assets We will have to stop trading with the other country because they are not buying any of our goods Military hardware Movies