1. When an Italian student attends a US college, which of the following balance of payments entries occurs for the United States?

a) A service export

b) A good export

c) A capital flow

d) A direct investment

2. All of the following are appropriate response for a U.S. exporter to appreciation of the dollar EXCEPT?

a) raise the foreign currency price if the dollar appreciation was expected to be temporary and the cost of regaining     market share was minimal

b) move some production offshore if the appreciation were expected to persist for an extended period

c) keep the foreign currency price constant if demand is highly elastic

d) keep the local currency price constant if demand is highly elastic