Provide suitable answers in the questions below and provide examples where necessary

1. Define the balance of payments

2. Why would it be useful to examine a country's balance of payments data?

3. The United States has experienced continuous current account deficits since the early 1980s. What do you think are the main causes for the deficits? What would be the consequences of continuous U.S. current account deficits?

4. In contrast to the U.S., Japan has realized continuous current account surpluses. What could be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?

5. Comment on the following statement: "Since the U.S. imports more than it exports, it is necessary for the U.S. to import capital from foreign countries to finance its current account deficits."

6. Explain how a country can run an overall balance of payments deficit or surplus.

7. Explain official reserve assets and its major components.

8. Explain how to compute the overall balance and discuss its significance.