What would happen to the world if the economy of the US suddenly fell to 0

I’m presuming that your question is about “What would happen to the world if American economy declines drastically?”

To measure the Economic performance of country the best measure is by calculating it’s GDP.

Equation for

GDP = C + I + G + (X – M) or GDP = private consumption + gross investment + government investment + government spending + (exports – imports)

So, In order to possess a stable economy country should perform well in all the above.

Any country in the world is not self-sufficient for its consumption, hence they rely on import or if it has surplus of produced goods or resources they export.

The policies adapted by the government plays a crucial role on performance of countries economy.

America being the largest economy with the contribution of 24.32% to the World’s GDP, crisis in USA will effect the global economy.

This had happened earlier once in 1929, “The great Depression”. This is worst global economic crisis ever faced by world after Industrialization. The depression started in America, then it was spread to the western countries and acutely affected the Asian countries.

During 1930 , ‘The great depression’ had hit the European countries. All the economies plummeted across Europe which led to the rise of Adolf Hitler. He wanted to make Germany as an Economic super power .

Rest is known to everyone. The implications of crisis in the US economy causes global melt down.

Comments

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