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Chapter 22: Problem 9

An article in the Wall Street Journal in mid-2017 noted, "Mexico's economy kept up steady growth in the first quarter, expanding for a 15 th consecutive period despite concerns that strained trade and investment relations with the U.S. will bring about a sharp slowdown." During this period, why were some observers concerned about Mexico's economic relations with the United States? Why are these relations particularly important if the Mexican economy is to experience sustained growth?

Short Answer

Expert verified
Concerns about Mexico's economic relations with the U.S. were due to potential negative impacts like reduced market access and foreign investment. These relations are important for sustained growth as they provide opportunities for economic expansion and development.

Step by step solution

01

Understanding the Economic Context

Consider the geopolitical and economic context described. In the exercise, it highlights that Mexico had consistent growth for a prolonged period. However, the stability of this growth was perceived to be threatened due to strained relations with the U.S.
02

Impact of Economic Relations

Assess the potential impacts of strained trade and investment relations on a national economy. Among the negative impacts, it can limit the country's access to markets, reduce foreign direct investment, and hamper employment rates. This understanding gives a sense of why there were concerns about Mexico's economic relations with the U.S.
03

Importance of Economic Relations for Sustained Growth

Identify the role of trade and investment relations in sustained growth. It's crucial to realize that these relations can provide opportunities for market expansion, job creation, technological transfer, and more, which are key components for an economy to sustain its growth.

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