Why would drop in foreign confidence in us ability to repay

Reference no: EM13186516

A Wall Street Journal article, "As Fear of Deficits Falls, Some See a Larger Threat," describes the following threat of a high U.S. budget deficit: [T]he investors who finance our deficits by buying Treasury bonds and bills, especially the foreigners who buy a larger share of them than ever, will question our ability to repay them, and balk at lending more-triggering a big drop in the dollar and much higher interest rates.
a. Why would a drop in foreign confidence in the U.S. ability to repay debt lead to a drop in the dollar and much higher interest rates?
b. In what way are higher interest rates and a lower value of the dollar bad for the U.S. economy?

Reference no: EM13186516

Questions Cloud

Explain a sample obtained from that mixture : A sample obtained from that mixture containing 443900 particles weighs 10.0g. Determine the number and percent relative standard deviation of NaCN particels from a sample of the mixture weighing 7.16g.

Explain calories of heat in the process : A piece of metal weighing 10.0g is raised in tempreture from 25 C to 76.5C. it is found that it absorbed 47.6 calories of heat in the process.

Write a program that simulates an airplane race : Program will use a function that has the following parameters: time and acceleration and function will pass back two data items: speed and distance.

State sodium hydroxyde in the purification of a solid : adding sodium hydroxyde in the purification of a solid by recrystallization experiment?

Why would drop in foreign confidence in us ability to repay : A Wall Street Journal article, "As Fear of Deficits Falls, Some See a Larger Threat," describes the following threat of a high U.S. budget deficit: [T]he investors who finance our deficits by buying Treasury bonds and bills, especially the foreign..

Compute the molarity of the solution : The [Br] of the resulting solution if 0.672 M. Assuming the volume is additive, calculate the molarity of the first solution?

How many tickets will be sold : N(x)=-0.4x^2+8.8x+14 where x is the number of days since a concert was announced; when will sales peak and how many tickets will be sold.

How many watches must he repair to have the lowest cost : Bob owns a watch repair shop. He has found that the cost of operating his shop is given by C(x) = 4x2-296x+85 , where c is cost and x is the number of watches repaired. How many watches must he repair to have the lowest cost?

What functional dependencies can you identify : Suppose you have a relation schema about teaching classes that has the following attributes: Class, Instructor, Time and Room - based on your understanding of this scenario, what functional dependencies can you identify that hold on this relation?

User Account

All Pages