Question

Compare and contrast the US GDP with another country's GDP ranking. What are the similarities/differences? What are the strengths/weaknesses of each country - look to analyze the composites that comprise GDP (consumption, investment, government spending, net exports).

Answer 1

ANSWER:

GIVEN THAT:

COMPARING AND CONTRAST THE US GDP:

Based on aggregate demand components Gross Domestic Product of the country was calculated. The components are:

A. Consumption (C)

B. Investment (I)

C. Government Spendings (G)

D. Net Exports (E-M) ,{exports(E), imports (M)}.

1. GDP is the total economic output of a country per annum and tells us about at what the country is good at producing.

2. The formula for calculating GDP is :

C+I+G+(E-M)

A. GDP OF US:

1. US is the first largest economy in GDP and increases year by year and atmost stands at the first place.

B. GDP OF US PERCENTAGES ON COMPONENTS:

1. Consumption : 68%

2. Investment : 17%

3. Government Spendings: 18%

4.  Net Exports : (-3%)

C. STRENGHTS:

1. Purchasing Power Parity of US is more when compared to other nations.

2.  US stands at first place at personal consumption.Economy mostly earns at personal consumption and most of the people will prefer domestic goods .

3. Investments on firms are at maximum percentage.

4. Government Spendings are more on public welfares.

D. WEEKNESSES:

1. As it is a capital economy the government handover is less.

2. The net exports is in negative because importing goods are more than exporting.

E. GDP of India:

1. India is the a developing country and it stands as a sixth largest economeconomy in GDP .

F. Percentages of GDP India:

1. Consumption : 54.9%

2.Investment : 31.6%

3.Government Spendings : 16.8%

4. Net Exports : (-3.3%)

G. Strengths:

1. India is the third lagrest economy in purchasing power parity , maximum production was done in consumers consumption.

2. As it is a developing economy the investment on the shares and stocks purchasing will be more.

H. Weeknesses :

1. Government Spendings are at minimum due to corruption .

2. Exports are less when compared to Imports because most of the MNC'S are there in India and most of the Indian people prefer to buy foreign goods instand of domestic goods. This affects the economy in consuming the domestic goods.

I. Similarities:

1. Both of the countries are good at consumption .

2. Exporting goods are less and importing goods are more in both the countries.

J. Difference:

1. US is the capital economy and India is mixed economy .

2. Government Spendings are more in US when compared to India because of corruption.