Economics Homework Help

I’m working on a economics question and need a sample draft to help me learn.

Guyana is a country that uses the Guyana dollar (g). It has foreign reserves of $400 million. The government has issued $600 million worth of debt which is denominated in $US.

Assume Guyana discovers oil and, as a result, there is massive investment by SHELL oil company into extraction facilities with Guyana. This is before any oil is exported.

a. IF the Guyana dollar were initially floating at 200 g/$, would this investment be more likely to move the exchange rate to 300 g/$ or 100 g/$? Clearly explain how the $US S&D curves shift in the foreign exchange market (when measuring g/$).

b. Does this result in a BOP surplus or deficit or no change (clearly explain why)?