Explain why international capital markets have expanded since the ...

[CORALGRILL2014]

Explain why international capital markets have expanded since the 1980s.
 
  What will be an ideal response?

Question 2

Suppose the U.S. Congress is successful in enacting tariffs large enough to eliminate the current account deficit. What would happen to the level of domestic investment?
 
  A) It would rise and exceed national saving.
  B) It would fall to a level equal to national saving.
  C) It would not change.
  D) It would rise to a level equal to net foreign investment.

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Answer to Question 1

Many governments have removed restrictions on foreign investments in financial markets since the 1980s, advances in communications and computer technology have made financial exchanges simpler and allowed investors access to information for making investment decisions, and worldwide economic growth has increased the level of saving available for investment.

Answer to Question 2

B