(a) Suppose that there is a large purchase by Americans of new lower priced Chinese-made high definition televisions. Given your answers to problem 3, explain whether the Chinese government must buy or sell dollars and by how much if it wants to maintain the value of the yuan relative to the dollar at the level of your answer in part b of problem 3.
(b) Suppose that there is a large purchase by the Chinese of a new American-made airplane. Given your answers to problem 3, explain whether the Chinese government must buy or sell dollars and by how much if it wants to maintain the value of the yuan relative to the dollar at the level of your answer in part b of problem 3.