Question

In the 2008 global financial crisis, many investors considered the US economy a safe place to move their assets What is the predicted impact of this inflow of financial capital to the US, which is a large, open economy, on the US interest rate and the US exchange rate, holding other factors constant Illustrate your answer graphically and explain in words.

Answer 1

Answer:

Good for US interest rate and the US exchange rate.

Explanation:

The predicted impact of this inflow of financial capital to the United states of America is good for the economy as well as for US interest rate and the US exchange rate when the movement of assets occur to the United states of America. The economy of the United states of America gets to be better due to this action of investors. This 2008 global financial crisis greatly damaged the economy of United states of America so this action bring some betterment in the economy.