How would a slow down in us economy effect the Uk macro economic perfomances? i got this in an exam?

Question

How would a slow down in us economy effect the Uk macro economic perfomances? i got this in an exam?

Answer 1

An economic slow down of the american economy will have catastrophic effects on all european macro econonmy.

the macro economy is based mainly on three major factors:

the activity of the national economy as a whole

the level of prices at the local market

the different connections available with other markets.

these three levels are tightly connected with the US economy

Britain drives US cars. Britain relies on American banks. Britain eats american foods and wear american clothes

there is no way you can cpnceive the british macro economy outside the PacAmericana..

Answer 2

UK exports to the US decrease lowering incomes. Possible that UK imports from US are cheaper making real incomes higher.

Bottom line you can't predict exactly what will happen since it depends on levels of exports and if imports are affected through price

Answer 3

I think we are witnessing these effects already.

UK policy is so closely linked to US [ a reason we never joined the euro] that we are effected far greater than other european countries to a down turn in US.