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Suppose the government institutes stricter controls on illegal immigration that causes a significant decrease in the number of migrant farm workers travelling to the US
Suppose the government institutes stricter controls on illegal immigration that causes a significant decrease in the number of migrant farm workers travelling to the US and working in the US this summer. Assume migrant farm workers spend a significant portion of their income on consumption in the US. Also assume they take jobs that no current US residents would do. (i.e. with fewer illegal immigrants, certain jobs are not performed). Use the AD/AS model to predict what will happen in the US economy. (Assume the AS curve is sloping. Both curves shift.) e. Real GDP unambiguously increases; however, the price level may increase or decrease. b. Real GDP decreases and the price level decreases. c. Real GDP increases, but the price level decreases. d. Real GDP unambiguously decreases; however, the price level may increase or decrease. a. Real GDP increases and the price level increases
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