will shift their funds to Investment B—and the supply curve of financial capital for Investment A will shift back

to the left while the supply curve of capital for Investment B shifts to the right.

The United States as a Global Borrower

In the global economy, trillions of dollars of financial investment cross national borders every year. In the early

2000s, financial investors from foreign countries were investing several hundred billion dollars per year more

in the U.S. economy than U.S. financial investors were investing abroad. The following Work It Out deals with

one of the macroeconomic concerns for the U.S. economy in recent years.

WORK IT OUT

The Effect of Growing U.S. Debt
Imagine that foreign investors viewed the U.S. economy as a less desirable place to put their money because of

fears about the growth of the U.S. public debt. Using the four-step process for analyzing how changes in supply
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