The accompanying diagram shows the assets of the rest of the world that are in the

Chapter 0, Problem 2

(choose chapter or problem)

The accompanying diagram shows the assets of the rest of the world that are in the United States and U.S. assets abroad, both as a percentage of rest-of-the-world GDP. As you can see from the diagram, both have increased nearly fivefold since 1980. 60% 50 40 30 20 10 Percent of rest-of-the-world GDP Year 1980 1985 1990 1995 2000 2005 2008 Rest-of-the-world assets in the United States U.S. assets abroad a. As U.S. assets abroad have increased as a percentage of rest-of-the-world GDP, does this mean that the United States, over the period, has experienced net capital outflows? b.Does this diagram indicate that world economies were more tightly linked in 2007 than they were in 1980?