Economics Class...?

Question

What would happen to the economy if 12 million illegal aliens were sent bact to their country overnight?

Sites or articles proving your theory would be great!

Answer 1

No one can answer this question. It really depends if the illegal aliens are employed, have health insurance, etc.

If the illegal aliens are employed in low-income jobs, but lack health insurance, then you have to determine if their overall contribution to society (i.e, keeping costs low due to their low labor input costs) exceeds the drain they cause in the public school system (kids), crime costs (if they get jammed up), and healthcare costs (if uninsured).

It is all in the assumptions. In the short run, the lack of cheap labor could drive up prices in every market. In the long run, these costs could be driven back down and may even help. We may lose fast food restaurants (because of higher labor costs due to the loss of aliens) but save in productivity because people eat less..

There is no way to answer this question. If your teacher tells you otherwise, print this out and have he/she read it.

Answer 2

No time for back up but the hospital would not be in a bind for no paying customers.

Answer 3

Positive or normative answer?

All feelings aside...

Specifically, especially if this is a macroeconomics class, than Aggregate Demand falls immediately, because there is less consumer income. Later, Aggregate Supply falls, because wages will rise via less supply in the labor market.

These things will decrease GDP, raise prices, and lower employment figures. The business cycle will turn downward, and we may enter a recession.

These are the things you can be assured of. Aside from this, it depends. It depends is always the right answer for value based economics, you can never fail with it.

Do immigrants provide higher net benefits than costs to society? Do they cost society, but will privide lasting benefits in ten years, or fifty years?

It depends.