Question

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

Short answer

The United States exports 14% of its GDP, indicating that it is somewhat reliant on international trade, with a strong domestic market. On the other hand, Germany exports 50% of its GDP, which shows a higher dependence on international trade and strong integration into the global economy. This difference highlights the varying levels of export-oriented economies between the US and Germany.

Step-by-step solution

Define GDP

Gross Domestic Product (GDP) is the total monetary value of all goods and services produced in a country within a specific time frame (usually one year). It is a widely used measure to assess the economic health of a country.

Explain the significance of exports for a country's economy

Exports contribute to a country's economy by bringing in revenue, creating jobs, and supporting industries that produce goods and services for export. A higher percentage of exports indicate that a significant portion of a country's economy is focused on international trade and is heavily integrated into the global economy.

Examine the US's exports as a percentage of GDP

The United States exports 14% of its GDP, which means that 14% of the total value of goods and services produced in the US is exported to other countries. This suggests that the US economy is somewhat reliant on international trade, but also has a strong domestic market as the majority of its GDP (86%) is not derived from exports.

Examine Germany's exports as a percentage of GDP

Germany exports 50% of its GDP, which means that half the total value of goods and services produced in Germany is exported to other countries. This indicates a higher level of dependence on international trade and a strong integration into the global economy when compared to the US. Germany's economy is highly export-oriented, suggesting that it has a highly competitive manufacturing and services sector and an extensive global trading network. To summarize, the United States exports 14% of its GDP while Germany exports 50% of its GDP, reflecting the different levels of reliance on international trade and integration into the global economy for these two countries.