Question

In the 1990s and the first two decades of the 2000s, investors from the Asian economies of Japan and China made significant direct and portfolio investments in the United States. At the time, many Americans were unhappy that this investment was occurring. True or False: It was better for the United States not to receive this foreign investment because it shrank the capital stock. True False True or False: It's best for Americans that China and Japan, rather than Americans themselves, made the investment, so that Americans can have more to spend on consumption. True False

Answer 1

It was better for the United States to receive the direct and portfolio investments from Asian countries like China and Japan in 1990s and first decade of 2000s, than not to receive it because this investment was making the United State Economy's capital base stronger. The increased capital stock contributed to the growth of the economy of the US.

It would have been better for the United States to have made this investments itself, because then they would have received all the returns on the investment themselves rather than it being repatriated to Japan and China.

Step-by-step explanation: