Recall the Application about the U.S. "Locomotive Effect": how U.S. growth affects foreign economies and the demand for foreign products, to answer the following question(s). From the early 1990s until quite recently, the U.S. economy grew faster than the rest of the world, with its share of the world economy increasing from approximately 26 percent in 1992 to over 32 percent in 2001. Because the U.S. economy is such an important part of the world economy, its growth promoted growth in foreign countries.
-According to this Application, as the U.S. economy grew from the early 1990s, U.S. exports also increased as our demand for foreign products promoted growth in foreign countries. This increase in exports would tend to

Question

Quizplus · Accepted Answer

As U.S. exports increased due to the growth of foreign countries, this would create more demand for U.S. goods and services, leading to an increase in U.S. GDP and a reduction in unemployment in the short run.

Recall the Application About the U