Economics Homework Help

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

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 in extraction facilities. This is before any oil is exported.

If Guyana maintains a pegged exchange rate to the $US ($) at 200 g/$:

a. Explain how and why the $US S&D curves shift such that the peg is maintained

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