Why do booms and recessions tend to be transmitted across national borders?
The GDPs of the major economies are linked by trade. A boom in one country tends to raise its imports and hence push up exports and GDP in other countries. Similarly, a recession in one country tends to pull down GDP in other countries. Suppose a boom abroad raises GDPs in foreign countries. With rising incomes, foreigners will buy more American goods?which means that U.S. exports will increase. But an increase in our exports will, via the multiplier, raise GDP in the United States. By this mechanism, rapid economic growth abroad contributes to rapid economic growth here. The same mechanism also operates in reverse.
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A(n) ________ relates each possible outcome to its probability of occurrence
A) probability distribution B) frequency C) expected value D) coin toss
Which combination of signals would be a strong indication that Fed policy is too expansionary and that a shift to a more restrictive policy is in order?
a. commodity prices are falling and the dollar is appreciating. b. commodity prices are rising and the dollar is depreciating. c. commodity prices are rising and the dollar is appreciating. d. commodity prices are falling and the dollar is depreciating.