If a war broke out abroad, it would affect the U.S. economy in many ways. Use the
Question:
a) The U.S. government, fearing it may need to enter the war, increases its purchases of military equipment.
b) Other countries raise their demand for high-tech weapons, a major export of the US.
c) The war makes US firms uncertain about future, and the firms delay some investment projects.
d) The war makes US consumers uncertain about the future, and the consumers save more in response.
e) Americans become apprehensive about traveling abroad, so more of them spend their vacations in the US.
f) Foreign investors seek a safe haven for their portfolios in the University States. I don't understand question f, why does this lead to an exogenous shock of the CF curve? Can someone help me by explaining + using a graph.
Macroeconomics
ISBN: 978-1464168505
5th Canadian Edition
Authors: N. Gregory Mankiw, William M. Scarth