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

Question

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

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

In the 2008 Global Financial Crisis, Many Investors Considered the U.S