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In the early 2000s, China has used its savings to finance American investment. In other words, the Chinese have been buying American capital assets. (a)
In the early 2000s, China has used its savings to finance American investment. In other words, the Chinese have been buying American capital assets. (a) If the Chinese decided that they no longer wanted to buy U.S. assets, what would happen in the U.S. market for loanable funds? Specifically, address the impact on: (i) U.S. interest rates (ii) U.S. savings (iii) U.S. investment (b) Will the dollar appreciate or depreciate? Explain
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