What are the implications for a country attempting to manage its domestic economy if it is subject

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What are the implications for a country attempting to manage its domestic economy if it is subject to an international business cycle? How might it attempt to overcome such problems? The problem is that some of the causes of its own cyclical fluctuations will be outside its control. What happens in other countries will affect its own domestic situation via changes in imports and exports, changes in the prospects for investment by domestic companies abroad, changes in exchange rates and changes in international interest rates. For example, if the USA moves into recession and, as a result, there is a reduction in the quantity of imports it consumes, then the level of export sales in the UK will fall. The more dependent a country is on international trade, the greater these influences are likely to be.

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Essential Economics For Business

ISBN: 9781292728940

7th Edition

Authors: John Sloman, Elizabeth Jones

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