In: Economics
Question 11 pts
In the 20th century the U.S.
was always a debtor nation. |
went from being the world’s largest debtor nation to the world’s largest creditor nation. |
was always a creditor nation. |
went from being the world’s largest creditor nation to the world’s largest debtor nation. |
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Question 21 pts
The US dollar would be most likely to fall if:
US interest rates are low. |
US profit rates are high. |
a lot of tourists come to the U.S. |
US exports are low. |
Ans:- d) went from being the largest creditor nation to the world's largest debtor nation.
As the country has been facing budgest deficit for a long time, US is the largest debtor in the world. As the country spends more money buying merchandise from foreign countries due to higher numbers of US customers to the foreign products, the domestic market of the country gradually declined which led to few investments and turned its largest creditor tag with an investment surplus of $136.9 billion in 1982 to the largest debtor with an investment deficit of $110.7 billion in 1985 transferring billions of dollars to foreign lands for automobiles, televisions and electrical and other equipments.
Ans:- a) US interest rates are low.
The US dollar would be most likely to fall with the falling interest rates as investment will go down with the falling interest rates. Usually, higher interset rates lead to the increasing numbers of investment resulting in stronger currency.