Please help me from #1 to #2.

Thank you.

1. The Balance of Payments (BOP) measures all international transactions between two countries. The chart below shows different transactions between the US and China United States China Purchased $800 of goods from China Chinese spent $1000 on US goods Americans spent $100 in Chinese stock market Chinese spent $300 on US services Americans spent $1000 on services from China Chinese purchased a $300 business in the US Chinese government purchased US bonds a. Assuming that both goods and services are included in the balance of trade, which country has a trade deficit and which has a trade surplus? Explain how you got your answer. Explain why these countries can't both have a trade deficit. ( 14) b. Assuming that these are all the transactions between these two countries, calculate the dollar value of US bonds held by the Chinese government. Explain how you determined your answer. 13) c. Calculate the value of the current accounts and financial accounts for each country. Explain why one country must have a current account deficit and a financial account surplus. ( 15)2. Assume that Canada and Kenya are trading partners. a. If the real interest rate in Canada decreases, what will happen to the financial accounts for both Canada and Kenya. ( /4) b. Assume instead that Canada experiences significant inflation compared to Kenya. Draw the foreign exchange market for the Canadian currency and show what happens to the demand for Canadian dollars. Be sure to identify if the Canadian dollar will appreciate or depreciate? ( 14)