The implications for the global economy of a major economy or economies with imbalances deciding to take corrective action
When a large economy fixes its trade imbalance, the policies it uses ripple outward and affect growth, jobs, and trade in other countries too.
Real World
When the US introduced sweeping import tariffs in 2018 to reduce its trade deficit with China, China retaliated with its own tariffs, slowing global trade volumes and hitting commodity-exporting economies like Brazil and Australia as collateral damage.
Exam Focus
Use 'spillover effects' and name specific trading partners in your answer — global implications questions reward geographic specificity and chain reasoning.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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