Question

Briefly contrast a nation’s level of trade with its balance of trade and identify three factors that strongly influence a nation's level of trade.Then identify and list from greatest to smallest the main budget categories for the US federal government.

Answer 1

Nation's level of trade and balance of trade sounds similar, but these two are very different. A high level of trade indicates that a good portion of the nation's production is exported. But it also indicates the imbalance of trade.Balance of trade implies the balance between exports and imports.

A country's level of trade tells how much of its production , it exports . It is measured by the percent of exports out of GDP. Balance of trade tells us if the country is running a trade surplus or trade deficit.

Three factors that strongly influence a nation's level of trade:

1. Size of the economy: Large economies can do much of their trading internally , while small economies have less ability to provide what they want internally.

2. Geographic location : Nations that are neighbors tend to trade more , since transportation and consumption costs are lower.

3. History of trade: Some nations have long and established patterns of international trade.

List of budget categories for the U.S federal government:

Health care (28% of spending)

Social security (24% of spending)

Non defense discretionary spending (16% of spending)

Defense (15%)

Interest (6%).