5. Exchange Rate Effects on Trade. a. Explain why a stronger dollar could enlarge the U.S. balance of trade deficit. Explain why a weaker dollar could affect the U.S. balance of trade deficit (10 points). b. It is sometimes suggested that a floating exchange rate will adjust to reduce or eliminate any current account deficit. Explain why this adjustment would occur (10 points). c. Why does the exchange rate not always adjust to a current account deficit? (10 points)