Imports and Exports of a country.

Authors Avatar

Imports and Exports of a country

Countries (developing and industrialized or developed countries) all over the world are engaged in commerce (import and export) that generates revenues. However, global market fluctuations in good and services seasonally may cause depressions in growth and productivity resulting in lower revenues. These problems appear to be greater in developing countries whose population further diminishes increases in revenues.

Unrestrained spending or misguided fiscal policies along with slow growth and productivity in the government and private sectors, trade imbalances, excessive national debt and\ combinations of these factors are responsible for poor economic growth or disaster and fiscal chaos.  This discussion is focused on measures taken by an industrialized nation and a developing country and how these decisions affect the exchange rate of their respective countries. Here are two examples.

The United States of America is one of the most industrialized and developed nations in the Western hemisphere. With a population of over 300 millions inhabitants, this country generates billions of dollars in revenues through trade, manufactures and other businesses in and out of the country. In the last three years, the economy of this country has suffered serious setbacks in trade balances (or imbalance), productivity and growth, humongous national debt and low domestic interest rates.  Increasing cost in production of merchandise in the US has forced companies to build factories overseas and sell their products in the US. Trade imbalances are also affecting the economy. The country imports more foreign-made goods but does not export as much US-made goods to other countries, resulting in a huge trade deficit.  The trade deficit, and poor revenue collection by the government treasury because of non-productive economy, the government is forced to borrow huge sums of money that produces budget deficit.

Join now!

How do the trade deficits, poor economy and bunker-busting budget deficits affect the overall performance in the US economy and the psychic of the consumers? Given sufficient time the economy will recover and show sustainable growth. In the short term, the government has one strong weapon that helps to regulate or stimulate sluggish economy: tax cut may spur growth but it is a temporary measure. The last tax cut was may targeted to benefit the upper one percentile of Americans making $100,000 and over. The other weapon is interest rates. Interest rate is the amount or surcharge the federal bank ...

This is a preview of the whole essay