1. China is a large open economy with an extraordinarily high saving rate. If, as seems likely, there is a decrease in desired saving in the coming years, what effects should we expect to see on China's trade balance (net capital flow), domestic real interest rate, and actual levels of saving and investment?

Answer rating: 100% (QA)

If Chinas desired saving rate falls we can expect several potential effects on its trade balance domestic real interest rate and actual saving and inv... View the full answer