Economics (MindTap Course List)
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Economics (MindTap Course List)
An economist is sitting in the Oval Office of the White House, across the desk from the president of the United States. The president asks, “How does the unemployment rate look for the next quarter?” The economist answers, “It’s not good. I don’t think Real GDP is going to be as high as we initially thought. The problem seems to be foreign income; it’s just not growing at the rate we thought it was going to grow.” How can foreign income affect U.S. Real GDP?
Describe the unemployment rate in the next quarter.
In this case, foreign income is linked to the unemployment rate in the US through changes in real GDP. If foreign income decreases, then foreigners will buy less export from the US...
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