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Effects of a Decline in Output on a Country

Question

Discuss why a country may suffer if its output falls.

Category:

Macroeconomic Factors and Policies

Preview Answer

STEPS TO WRITE ESSAY 💡MAIN POINTS💡OVERVIEW

Outline:

Introduction:

Briefly introduce the topic of the essay, which is about whether or not a country will suffer if its output falls.

Reasons why a country may suffer if its output falls:

Lower output may result in a reduction of goods and services available, which can lead to a decrease in living standards and income.
With lower output, fewer workers may be required, which may increase unemployment rates in the country.
If consumers cannot purchase domestically produced goods, they may turn to imports, which can cause exports to fall, leading to a current account deficit.
Multinational corporations may leave the country due to the lower output, which may reduce employment opportunities for the people in the country.
Tax revenue may fall, which can limit the government's ability to spend on essential services like education.

Reasons why a country may not suffer if its output falls:

If output falls by less than the population, living standards may actually increase.
With lower output, external costs such as pollution and the destruction of natural beauty sites may decrease.
Lower output can reduce the demand for imports, leading to an improvement in the current account position.
Conclusion:

Sum up the main points of the essay and conclude whether or not a country will suffer if its output falls.

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