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  • Card 7 / 12:
    Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price level.

    Since imports depend on GDP, if Mexico goes into recession, its GDP declines and so do its imports. This decline in our exports can be shown as a leftward shift in AD, leading to a decrease in our GDP and price level.

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Questions & Answers

what is pareto production efficiency, pareto exchange efficiency and pareto output efficiency.
elmutallib Reply
utility is the amount of satisfaction derived from the consumption of a particular commodity
abubakar Reply
what is utility
Amankona Reply
The best method of production in an under-populated country is
franklin Reply
How can you derive demand curve for the axioms of revealed preference?
Debadyuti Reply
what is drmand and supply
Akinboro Reply
what are are the functions of the central bank
Princess Reply
what is law of increasing opportunity cost
Amuda Reply
what is demanď elasticity
Eric Reply
what is demand schedule
Chinedu Reply
what is real and nominal value
Christian Reply
I want to know all about long run cost and short run
what is the current population situation?
Satya Reply
Demand is quantity of goods and services a consumer is willing and able to buy at a given Price at a particular period of time . WHILE Supply can be seen as quantity of goods and services a producer is willing and able to produce at a given Price at a particular period of time
Zubairu Reply
UTILITY simple mean goods and services
What is demand and supply
Lauratu Reply
What is the different between cross elasticity of demand and price elasticity of demand
Benjamin Reply

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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