On track to generate an estimated Gross Domestic Product (GDP) of US$14.2 trillion for 2009, the United States of America is the world’s wealthiest country. America generated $3.4 trillion in international trade transactions in 2008. The U.S. sold $1.291 trillion worth of American exports to other countries while spending $2.112 trillion on imported foreign goods.
Economists use a simple formula to gauge how dependent an economy is on international trade for its national output wealth: divide a country's total trade (exports plus imports) by its overall GDP.
Understanding the Global-Trade-to-GDP Ratio
Sometimes, the foreign-trade ratio for a country can exceed 100% of GDP. This is because GDP is the sum of four components: consumption, investment, government spending plus net exports. The last component, net exports requires subtracting imports from exports. In contrast, a country’s total trade is the result of adding exports to imports. The total trade number is positive and therefore always exceeds net exports which can be negative.
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