Thursday, May 28, 2015

How does the global economy affect the US economy?

The global economy affects the United States' economy in many different ways. For example, when there is a drought in a country from which the United States buys fruit, that country will not have the money coming in from those exports, and the United States may be unable to buy the fruit from an alternate country or may have to pay a much higher price for the fruit when buying it elsewhere. This affects US grocery stores and restaurants that sold the fruit, decreasing their revenue from customers who enjoyed the fruit (that now cannot be obtained due to the drought). Decreased revenues impact the stock market, and dips in the stock market affect us all.
There are other ways in which the global economy affects the United States' economy: war between outside nations affects both the global economy and the United States' economy, as unrest and fear in the dueling countries slowly grinds manufacturing to a halt. Without workers to manufacture goods, the exports from the countries at war will not be available to the United States, and the lack of these goods (which were once imported by the United States and sold for a profit) will in turn decrease revenue for the companies that bought them. Each country both imports and exports goods from all over the world, so all countries are intertwined, and the global economy is a web not only of buying and selling goods, but also of natural phenomena and very human circumstances.

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