Answer:
50 billion
Explanation:
Investment declines by $130 billion for every 1 percentage point increase in the real interest rate.
Decline in Investment because of higher real interest rate:
= 2 × 100
= $200 billion
Increase in Investment because of higher expected rate of return:
= 1 × 150
= 150 billion
Total decline in investment:
= -200 + 150
= 50 billion
Therefore, 50 billion of investment will be crowding out.
Answer:
What caused china's phenomenal economic growth rate over the last 30 years
There are many causes for China's economic miracle in recent decades.
The first cause is that China decided to open the country to foreign investment in some parts of the country, the famous Special Economic Zones, the first one having been located in the city of Shenzhen, north of Hong Kong. This flow of capital boosted inustrial growth.
The second cause is that China became a manufacturing powerhouse due to lower labor costs, reason why most developed countries outsourced a large precentage of their manufacturing sector to China.
A third cause is that the Chinese government worked closely with both domestic firms and foreign firms in specific sectors, promoting a mixed economy in between economic planning and a market economy.
why is it likely unsustainable in the long run?
China's growth is likely unsustainable in the long run because as a country develops and catches up with the advanced world, its rate of growth tends to fall due to a myriad of reason, from capital exhaustion to lower demographic growth, to a less dynamic consumer market in several sectors.
record book .................................................... .
<span>This statement is false. An absolute advantage is the countries ability to carry out a certain economically advantageous activity better than another country or group while a comparative advantage is the ability to carry out an economic activity better and more efficiently than another activity.</span>
