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Chapter 10: Q. 20 (page 266)

The United States exports 14% of GDP while Germany exports about 50% of its GDP. Explain what that means.

Short Answer

Expert verified

Level of trade of Japan is higher than the level of trade of US.

Step by step solution

01

Step1. Given information

US exports 14% of GDP

Germany exports 50% of GDP

02

Step2. Explanation

When we say US exports 14% of its GDP, it implies the export value of US accounts for a 14% of its GDP, i.e. 14% of its economic activity comes from exports.

Similarly for Germany, it means 50% of the GDP is coming from exports.

So, we can conclude that Germnay is indulged in more trading activities, particularly exports than the US comparatively. We say it is relative because the GDP size of the countries shall be different too.

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Most popular questions from this chapter

The GDP for the United States is \(18,036billion and its current account balance is -\)484billion. What percent of GDP is the current account balance?

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State whether each of the following events involves a financial flow to the U.S. economy or away from the U.S. economy:

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