How does the American and world economy work and need each other?
In: Economics
not any different than any other economy, just a global scale. America both buys AND sells a lot of things to other countries. if those transactions disappear, then both sides have to deal with the consequences.
There are also things like specialization and trade. No supplier (whether that’s a business or country) can be good at making literally everything they need AND also cost effective in doing so. Some countries are better at or more efficient at doing things than others. If you’re really good at making hats and can also make them for cheaper than I can, it makes more sense for me to buy hats from you than try to make them myself. This is mutually beneficial because you make sales and i save money.
or…..you’re good at making hats, but im great at making shoes. so we trade hats for shoes and we both come out better than if we both made our own hats and shoes.
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