Suppose each of the transactions listed in Test Yourself Question 2 was done by many Americans. Indicate how each would affect the international value of the dollar if exchange rates were floating.

Data from Test Yourself Question 2

For each of the following transactions, indicate how it would affect the U.S. balance of payments if exchange rates were fixed:

a. You spent the summer traveling in Europe.

b. Your uncle in Canada sent you $20 as a birthday present.

c. You bought a new Honda, made in Japan.

d. You bought a new Honda, made in Ohio.

e. You sold some stock you own on the Tokyo Stock Exchange.