Specifically address the following questions:
1. Explain how trade balance, interest rates, and exchange rates are related, and cite an example of how a rise or fall in one changes the others.
2. Does a deficit in China or the United States change the overall advantage or disadvantage of trade? Why?
3. Explore how the cost and quantity of imports and exports, such as electronic equipment, may be challenged by the rise and fall of these rates.
4. Incorporate the fluctuations of supply and demand into the costs incurred and decide ways management calculates estimations for further product needs.
5. Explain the philosophy of "international crowding out," citing an example of how this may occur, and describe how excessive borrowing in one country has affected interest rates in the United States.
As an example, China and the United States "borrow" from each other to finance needs by purchasing government-backed securities from the other country. This practice provides one country with additional funds and also gives the purchasing country more control over interest rates or "borrowing costs" in the future. How does these influence interest rates in the domestic country and foreign country? Can one country gain control over another financially by continually financing another country's debt?
Requirements of Submission:This milestone must follow these formatting guidelines: double spacing, 12-point Times New Roman font, one-inch margins, and discipline-appropriate citations. This paper should be a minimum of 2 pages in length in addition to the title and reference pages. The APA style format must be used when citing and referencing information provided. Provide your name, course number, a title to the paper, and headers and footers where applicable.