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1. (Kiugman, 0bstfelu & Nelitz, Ch 1S, Question 1). Shoulu the measuie of impoits useu in the
uNP accounts be uefineu to incluue only impoits of final goous anu seivices fiom abioau. What
about expoits.

2. (Kiugman, 0bstfelu & Nelitz, Ch 1S, Question 2). Some people iecommenu iestiictions on
impoits fiom China to ieuuce the Ameiican cuiient account ueficit. Bow woulu highei 0.S.
baiiieis to impoits affect its piivate saving, uomestic investment, anu goveinment ueficit. Bo
you agiee that impoit iestiictions woulu necessaiily ieuuce a 0.S. cuiient account ueficit.

S. (Kiugman, 0bstfelu & Nelitz, Ch 1S, Question S) Explain how each of the following
tiansactions geneiates two entiies in the 0.K. balance of payments, anu uesciibe how each entiy
woulu be classifieu:

a. A Biiton buys a shaie of Fiench stock, paying the sellei with a check on a 0.K. bank.

b. The }apanese goveinment caiiies out a foieign exchange inteivention in which it uses pounus
helu in a 0.K. bank to buy }apanese cuiiency fiom its citizens.

c. A touiist fiom Blackpool buys a meal at an expensive iestauiant in El Paso paying with a
tiavellei's check.

u. A Bampshiie (0K) wine makei contiibutes a case of cabeinet sauvignon foi a Nauiiu wine