Now shopping mall giant (Dalian) Wanda, owned by Chinaâs richest man Wang Jianlin, and Vanke, the worldâs biggest residential real estate developer, founded by the mountaineering-loving Wang Shi, have âstunned the capital markets,â in the words of Chinese news site The Paper, by announcing a âstrategic partnership.â.
The second macroeconomic consideration of increased imports is the impact on exchange rates. As we have shown in the previous section, as U.S. consumers increase their consumption of imports, the supply of dollars in foreign exchange markets rises.
The increase in money in the economy will increase demand for goods and services from D0 to D1. In the short run, businesses cannot significantly increase production and supply (S) remains constant. The economyâs equilibrium moves from point A to point B and prices will tend to rise, resulting in inflation.