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Economic Impact of Output Decline

Question

Discuss whether or not a country will suffer if its output falls.

Category:

Macroeconomic Factors and Policies

Frequently asked question

Preview Answer

I. 🍃Introduction
- Definition of economic output
- Importance of economic output in measuring a country's economic performance

II. Reasons why lower economic output may have negative effects
- Reduction in goods and services available to people
- Increase in unemployment
- Current account deficit due to increase in imports and decrease in exports
- Reduction in employment due to MNCs leaving the country
- Reduction in government tax revenue

III. Reasons why lower economic output may not necessarily have negative effects
- Rise in living standards if output falls by less than population
- Reduction in external costs such as pollution and destruction of natural beauty
- Improvement in current account position due to decrease in demand for imports

IV. Examples of countries with varying economic output and their effects
- High output countries such as the United States and China
- Low output countries such as Haiti and Zimbabwe

V. 👉Conclusion
- Summary of the effects of economic output on a country's economy
- Importance of maintaining a balance between economic output and other factors such as environmental sustainability and social welfare.

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