Question

Mexico trades with the united states. when the united states experiences negative economic growth, mexico's aggregate demand ______.

Answer 1

Mexico trades with the united states. when the united states experiences negative economic growth, Mexico's aggregate demand  decreases because its exports to the United States decrease. Mexico's AD curve shifts leftward.

What is economic growth?

• Economic growth is the rise or improvement in the market value of the goods and services generated by an economy over a predetermined period of time, adjusted for inflation.
• Traditionally, statisticians have calculated growth as a percentage rate of real gross domestic product, or real GDP.
• In order to remove the inflationary distortion on the prices of produced items, growth is typically calculated in real terms, or terms adjusted for inflation.
• Economic growth is measured using national income accounting.

Economic growth has both the benefits and disadvantages of GDP growth because it is calculated as the yearly percent change. The ratio of GDP to population is a typical metric used to compare the economic growth rates of different nations (per-capita income).

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