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Imagine a New Communication Technology Is Invented That Makes It

question 41

Essay

Imagine a new communication technology is invented that makes it easier for foreign investors to buy U.S.Treasury securities.
a.How would you draw the market for Treasury securities showing how the technology,holding all else constant,will affect demand?
b.What will happen to Treasury security prices?


Definitions:

Inefficient Allocation

A situation where resources are not used in the best possible way, often leading to waste or unmet needs.

Negative Externality

An undesirable outcome of an economic activity that affects third parties who did not choose to incur that cost or benefit.

Air Pollution

The presence of substances in the atmosphere that are harmful to human health, the environment or cause climate change.

Public Good

Goods that are non-excludable and non-rivalrous, meaning they can be used by many without diminishing the supply.

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