60-Essay_Plan_Imports_Economy

60-Essay_Plan_Imports_Economy - AS Macro: Assess the extent...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
AS Macro: Assess the extent to which a rise in imports may affect macroeconomic performance (25 marks) Like many macro questions, the focus is on the longer-term performance of the economy – this requires a brief explanation at the start of the answer – e.g. economic growth, unemployment, inflation and material well-being. First - build an analysis of how rising demand for imports might be detrimental to the economy 1. Loss of aggregate demand (C+I+G+X-M) as imports are a withdrawal from the circular flow 2. Use an AD-AS diagram to show this and possible employment effects (falling demand for labour) 3. If imports are taking up a growing share of total demand (known as import penetration ) this can threaten domestic jobs and lower domestic output and profits – give a couple of examples of declining industries. There is a chart showing import penetration on the next page. This may cause some structural unemployment in the economy. 4.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

60-Essay_Plan_Imports_Economy - AS Macro: Assess the extent...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online