I. As we have seen, the textbook defines a measure of trade and its significance
ID: 1135870 • Letter: I
Question
I. As we have seen, the textbook defines a measure of trade and its significance as (Er + 1m)/2/GDP × 100%. Question: why is there averaging of Exports and Imports in the numerator? As we have seen this, this averaging could lead to over-estimation or underestimation of trade. So, can you think of any reasons, practical or theoretical, that would justify using the average as opposed to the raw sum of Exports and Imports? 2. Find the export and import data for the U.S. for the most recent yea for which such data are available 2017. In terms of sources, you should use the official ones-any U.S. statistical agencies, IMF, or World Bank and cite them, including web pages. Be sure to separate services and goods within exports and imports. For goods, find top five 5) categories that are imported to and exported froin the US. For services, list top three (3) categories within exports and imports.Explanation / Answer
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1)
Answer-
The measure of trade is a concept that deals with both import and export of a nation. This means that the nation will have to calculate its net export and its net import to measure its trade.
However in many cases of countries like India, South Africa etc which have trade deficit i.e. they are importing more than they are exporting would have a biased trade measure if we just consider the sum of import or export. Summation in such case will lead to a very high value and which will not be a true measure of trade in comparison of the GDP of the country. Such addition will lead to extrapolation of values and the value might tend to look different than what they actually are in comparison to the GDP of the country.
Therefore we take a mean or average value of the two values which ascertain that no matter if the values are too high or low will not necessarily inflate the numerator and also give a mean value of trade positions of the nation, thereby giving a true value of the nations trade numbers.
2)
US is second largest exporting economy. its trade deficit is close to $ 750 Billion.
Top Five exported goods of USA:
Top five imported items of USA:
Top 3 exported services:
Top 3 imported services: