Answer: The following changes influence the rate of investment
in the US:
1) An increase in the share of the population in age
groups with high saving rate: Age structure of the country
may affect the demand for investment. saving is vital to the
country's economic health, both at the household and
firm-level.
- A rise in the savings ratio can have a very significant impact
on the economy as when people save more it enables the bank to lend
more as they are getting more deposits.
- country can see higher sustainable growth in the future.
- a higher saving can lead US companies to lend more to overseas
markets, stronger US external position.
- more the savings, more the investment.
- Higher savings, in the long run, may lead to an increase in
GDP.
- saving enables an increase in investment without worsening of
the US's foreign borrowing position.
- the nation's physical capital stock grows more quickly and the
economy is able to maintain a faster pace of growth.
(2) Improves investment opportunities in Europe may
influence the rate of investment in the US:
- Investment levels are influenced by the interest rate, economic
growth, expectations, technological development, availability of
finance from the bank, and other govt. policies
- All these factors are going on aright track in Europe that's a
reason their investment opportunity gas increased now this creates
competition for the US.
- As people all over the world are more likely to go for jobs in
Europe and more business will flourish in the US.
- Share market will boost in Europe that might hamper US shares
in the market.
- people will move from the US to Europe for real estate
properties.