Question

Which of the following statements is true?

Select the correct answer below:

The U.S. economy has had persistent trade surpluses since the 1970s

A large measure of exports as a percentage of GDP indicates large levels of globalization in a country.

If exports as a percentage of GDP are low, then a large trade deficit will not have a huge impact on a country's economy.

It is better for a country to have large exports as a percentage of GDP.

Answer 1

Answer:-  It is better for a country to have large exports as a percentage of GDP.

When a country exports goods, it sells them to a foreign market, that is, to consumers, businesses, or governments in another country. Those exports bring money into the country, which increases the exporting nation's GDP. Governments encourage exports. Exports increase jobs, bring in higher wages, and raise the standard of living for residents for residents As such, people become happier and more likely to support their national leaders.

Higher production leads to a lower unemployment rate, further fueling demand. Increased wages lead to higher demand as consumers spend more freely. This leads to higher GDP combined with inflation The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy.

The recent increase in the share of exports in GDP has been exceptional even by historical standards; after averaging about 25% in the five years leading up to the Canada-US Free Trade Agreement, exports as a proportion of nominal GDP have soared above 40%, the highest of any G7 nation.