I know that you are not taking Macro but Micro. However, as your economics instructor I would like (some times) to bring up international economic issues that (may) affect us in USA. Here is what I found and I want all of you try answering the question at the end of the "here we go". By the way, this topic connects to the international trade you already got exposed to in one of the previous chapters. Here we go: The government of England has decided to leave the European Union. The political consequence is that the prime minister resigned. The economic consequence is that the county currency (money) went down. Question: Should we care (here in the USA)? If yes, why? If not, why not? Be practical. Use some examples.

Yes, the United States should care.

Reason:

The move by England to leave the EU, commonly referred to as "Brexit," could hurt the US economy. The main reason for this is that the UK is the world?s fifth-largest economy. The UK is also one of the largest trading partners of the US. A lot of companies in the US have made substantial investments in the UK as a portal to the rest of Europe. Big companies like Rolls Royce and JP Morgan could be forced to move their investments to other European nations to save their business in Europe. A move like this is a significant factor that could lead Britain into a recession, which would weaken the pound even further, and this would significantly affect the trade with the US. Additionally, a lot of citizens from the UK could potentially try to migrate to the US and other nations, which would add on to the already snowballing immigration problem in the US.

Another reason why the US should care is that the Brexit will put a strain on the relationship between the US and whatever remains of the EU. It is without a doubt that the UK has a lot of influence in the EU. Its exit will, therefore, mean that the US will have a hard time communicating or influencing the EU as it did before with the help of the UK.

America will see a drop in the number of visitors coming from the UK since the exit will result in a weakened pound against the US dollar, which means that it will be much harder for the Brits to visit the US than it will be for Americans to visit the UK. A drop in tourist traffic leads to a decline in earnings from tourism, which needless to say is not suitable for the growth of the American economy.