Question

what is one clear benefit of foreign investment in the united states? a. foreign investment in the united states increases interest rates, creating more investment and greater future gdp. b. foreign investment in the united states makes the united states less dependent on other countries. c. foreign investment in the united states lowers interest rates, creating more investment and greater future gdp. d. foreign investment in the united states limits the amount of outsourcing that occurs. e. foreign investment in the united states provides more sellers of treasury bonds, making it harder to buy and sell.

Answer 1

Foreign investment in the United States typically lowers interest rates, which stimulates more investment and supports economic growth, contributing to a higher future GDP.

Step-by-step explanation:

One clear benefit of foreign investment in the United States is that it lowers interest rates, creating more investment and greater future GDP. When rates of return in the US are high relative to other countries, funds from abroad are attracted, leading to an increased demand for U.S. dollars to buy interest-bearing assets.

The increased demand for the dollar and the influx of foreign capital typically result in lower interest rates, which stimulates investment by making borrowing cheaper for businesses and consumers. This, in turn, supports economic growth and can contribute to a higher future GDP.