Lou Jiwei, Chief Investment Officer of China, is perhaps the most influential person in the U.S. economy today. He oversees the $1,250 trillion or so Chinese investment fund, which mostly consists of U.S. treasuries. Because he is investing heavily in the U.S. government (about two-thirds of the fund), we have very low interest rates. This is good for the U.S. as long as the positive economic party continues. But what happens if the music stops?[19]

Many do not believe the Chinese will cause a major disruption to the world financial markets. The author expects very little from them until after the Beijing 2007 Olympic Games. After the Olympics, many anticipate changes more in line with their recent $3 billion investment in the Blackstone Group, which purchases U.S public companies and privatizes them. The Chinese see this as a logical first step considering the xenophobic view from America when the Chinese tried to buy Union Oil Company of California directly.[20]

It is possible that the Chinese will economically squeeze America. However, if China is economically rational, they will force the point over the long run until America becomes of little importance to the world while China ascends.[21]Two centuries ago, Napoleon Bonaparte stated it so well: "When China awakens the whole world

Lou Jiwei, Chief Investment Officer of China, is perhaps the most influential person in the U.S. economy today. He oversees the $1,250 trillion or so Chinese investment fund, which mostly consists of U.S. treasuries. Because he is investing heavily in the U.S. government (about two-thirds of the fund), we have very low interest rates. This is good for the U.S. as long as the positive economic party continues. But what happens if the music stops?[19]

Many do not believe the Chinese will cause a major disruption to the world financial markets. The author expects very little from them until after the Beijing 2007 Olympic Games. After the Olympics, many anticipate changes more in line with their recent $3 billion investment in the Blackstone Group, which purchases U.S public companies and privatizes them. The Chinese see this as a logical first step considering the xenophobic view from America when the Chinese tried to buy Union Oil Company of California directly.[20]

It is possible that the Chinese will economically squeeze America. However, if China is economically rational, they will force the point over the long run until America becomes of little importance to the world while China ascends.[21]Two centuries ago, Napoleon Bonaparte stated it so well: "When China awakens the whole world

Question three

1. Is it true or false that perfect competition involves many sellers of standardized products?

2. On the market with perfect competition

3. Which of the following conditions indicate that a good is produced under perfect competition:

4. . The profit maximization condition for a firm in a market with monopolistic competition is the following (MR is marginal revenue, MC is marginal cost, P is price, ATC is average total cost, TR is total revenue)

5. Which of the following statements about monopoly is true?

6. There are differences between monopolistic and perfect competition regarding

7. Which of the following can be considered as the basic features of public goods

8. Which of the following solutions are not part of the ways of internalizing externalities:

9. . Normally, the natural economy is characterized by

10. Which of the following features define human needs