1) Briefly contrast a nation’s level of trade with its balance of trade and identity three...

1) Briefly contrast a nation’s level of trade with its balance of trade and identity three factors that strongly influence a nation’s level of trade.

Expert Solution

A nation’s level of trade reflects how much of its production it exports. It can be measured by the percent of exports out of gross domestic product, or the size of the economy. It displays how globalized an economy of a nation is. Few nations, such as Germany, have a high level of trade, which means they export nearly 50% of their total production. On contrary, the balance of trade reflects if the nation is running a trade deficit or trade surplus. A nation can have a low level of trade however a high trade deficit. (For instance, the United States only exports 14% of GDP, however has a trade deficit of $540 billion.)

The three factors strongly influence a nation’s level of trade includes the size of its economy, the geographic area, and history of trade. Larger economies with a limited history of international trade and few nearby trading partners will tend to have lower levels of trade. Small economies that includes nearby trading partners and a history of international trade will likely to have higher levels of trade.

Rahul Sunny answered 1 year ago

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