Slowdown of the other economies that import goods

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If the European Slump also leads to a slowdown of the other economies that import goods from the United States, the effect could be larger. To put a bound to the size of the effect, assume that U.S. exports decrease by 5% (as a result of changes in foreign output) in one year. What is the effect of a 5% drop in exports on U.S. GDP?

Reference no: EM132492478

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