Question

a) Use the internet, library, or other information source to research imports and exports for any state or country in the world. Pick a country or state and discuss its import goods and export goods. You should include some dollar values or % of GDP figures

b) For the country you choose, discuss some possible sources of comparative advantage for that economy.

Answer 1

( a ) Let us take the example of US.

US is the world's largest economy. The country's exports of goods and services in 2018 was worth $ 2.15 trillion and imports in the same year was $2.6 trillion.

International trade in goods and services as percentage of GDP for the US was around 23% in 2018.

US's main imports are capital goods ( 22% ) and consumer goods ( 21% ). Capital goods comprise engineering goods, heavy machineries, etc. from China and Europe. Most of the consumer goods such as TVs, computers, laptops etc. are imported from China. Other import goods are automobiles and its components, which it also exports. US also exports aircrafts, weapons and military goods and high technology software products and services.

( B ) We can see that the country's main exports comprise of items that need skilled labor and are capital intensive to produce, such as aircraft, military equipment etc. It shows that US has comparative advantage in producing such goods due to presence of highly skilled labor and abundance of capital.