Question
Research the balance of trade in the United States and China and relate how historical changes in exchange and interest rates have affected imports and
Research the balance of trade in the United States and China and relate how historical changes in exchange and interest rates have affected imports and exports between the two countries. Specifically address the following: Explain how trade balance, interest rates, and exchange rates are related, and cite an example of how a rise or fall in one changes the others. Does a deficit in China or the United States change the overall advantage or disadvantage of trade? Why? Explore how the cost and quantity of imports and exports, such as electronic equipment, may be challenged by the rise and fall of these rates. Incorporate the fluctuations of supply and demand into the costs incurred and decide ways management calculates estimations for further product needs. Explain the philosophy of international crowding out, citing an example of how this may occur, and describe how excessive borrowing in one country has affected interest rates in the United States.
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