Comparative and Absolute Advantage example

Haven't found the essay you need?

We can write it for you. On time. 100% original.

Order Now
Text Preview

Comparative and Absolute Advantage

The following three tables presents statistical data of several macroeconomic indicators for three chosen countries the US, Canada, and China:

United States

2009

2016

Real GDP (billion)

$14,541

$16,813

CPI

210

237

Real Exports (trillion)

$1,587

$2,128

Real Imports (trillion)

$1,61

$2,33

Unemployment rate

9,30%

4,90%

Industrial Production

-15%

-3%

Canada

2009

2016

Real GDP (billion)

$1371,15

$1550,54

CPI

113

126

Real Exports of Goods and services (billion)

$299

$390

Real Imports (billion)

$302

$405

Unemployment rate

8%

7,30%

Industrial Production

-15%

-1%

China

2009

2016

Real GDP (billion)

$5109,95

$11007,72

CPI

98

102

Real Exports of Goods and services (billion

$1,201

$2,342

Real Imports (billion)

$590

$1,340

Unemployment rate

4,30%

4,05%

Industrial Production

11,30%

6%

Tables above suggest that the economic growth varies among three countries. For instance, the US economy has improved in terms of GDP, industrial production rate and a decrease in the unemployment rate. However, trade balance at the end of FY 2009 was negative, caused by a number of imports exceeding exports. Trade deficit might cause the currency to decrease in value and therefore increase the cost of imports.

Canada displays stable growth of GDP, and at the same time slight change in unemployment rates. Canada’s trade deficit smaller in quantity, comparing to the US, but can still affect national currency rates. In addition, industrial production rates have improved significantly.

Chinese economy is well-known for its skyrocketing period of GDP growth. Through 2009 to 2016, the economy has managed to double its gross domestic output, while sustaining a mild increase in CPI, therefore signifying that consumer prices did not increase significantly, as it happened in the above countries. The Chinese economy is mostly supported by manufacturing capabilities, so the decrease in industrial production can be interpreted as a negative result. In addition, Chinese trade balance has worsened due to increased amount of imports. However, Chinese economy has managed to double its trading capabilities.

Works Cited

"Data | The World Bank". Data.Worldbank.Org, 2017, http://data.worldbank.org/.

"OEC - Canada (CAN) Exports, Imports, And Trade Partners". Atlas.Media.Mit.Edu, 2017, http://atlas.media.mit.edu/en/profile/country/can/.

"Real Gross Domestic Product". Fred.Stlouisfed.Org, 2017, https://fred.stlouisfed.org/series/GDPC1.

"United States Consumer Price Index (CPI)". Tradingeconomics.Com, 2017, …

Download Full Essay Show full preview

Disclaimer

Examples provided by Homework Lab are intended for the motivation and research purposes only. Do not submit any paper as your own piece of work. Every essay example belongs to students, who hold the copyright for the written content. Please, mind that the samples have been submitted to the Turnitin before and may show plagiarism in case of the repeated submission. Homework Lab does not bear any responsibility for the unauthorized submission of the examples.