Question

Recessions in Canada and Mexico would cause a. the U.S. price level to fall and real GDP to rise. b. the U.S. price level to rise and real GDP to fall. c. the U.S. price level and real GDP to fall. d. the U.S. price level and real GDP to rise

Answer 1

Answer:

c. the U.S. price level and real GDP to fall.  

Explanation:

Recessions in Canada and Mexico would cause the U.S. price level and real GDP to fall.  Recession in Canada and Mexico will cause U.S. price level and real GDP to fall because their economies are interdependent, and hence more Mexicans and Canadians will move into U.S causing an increase in production and supply of goods which will result in reduced price less of goods in the U.S and thus a a fall in real GDP.