China's (Mainland) Balance of Payments. Use the following balance of payments data for China (Mainland) from the IMF Does China's BOP balance in years 2007, 2010, and 2015? China's BOP in year 2007 was (in millions) $_________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2007? (Select from the drop-down menu.) China's BOP in year 2010 was (in millions) $___________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2010? (Select from the drop-down menu.) China's BOP in year 2015 was (in millions) $__________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2015? (Select from the drop-down menu)

In an economy open to trade, must a government budget deficit always be accompanied by an external sector deficit? Why or why not? Could a government budget deficit lead to a government budget surplus?

Supposed that a small open economy is running a trade deficit. The government enacts protectionist trade policies (such as a tariff or quota on imports) with a goal of reducing the trade deficit. Show the impact on the trade deficit? what is the impact on the volume of trade? explain whether the government was succesful in reaching its goal.

4. Analyzing the effects of a trade deficit You have just been hired by the U.S. government to analyze the following scenario. Suppose the U.S. agricultural industry is concerned about of fruit and vegetable imports to the United States, a practice that hurts domestic producers. Lobbyists claim that implementing a tariff on imp would shrink the size of the trade deficit. The following exercise will help you to analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. REAL EXCHANGE RATE (Units of foreign currency per dollar) Supply QUANTITY OF DOLLARS Demand Demand 0 Supply