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Over the past decade, some of Chinese saving has been used tofinance American investment. For example: Chinese havebeen buying American capital assets.

a) If the Chinesedecided they no longer wanted to buy US assets, what would happenin the US market for loanable funds. In particular whatwould happen to US interest rates?

b) What would happenin the market for foreign-currency exchange? In particular,what would happen to the value of the dollar and the US tradebalance?

International Economics, Economics

  • Category:- International Economics
  • Reference No.:- M9812598

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