Which country possesses the world's largest economy? Why do you ...

[mwit1967]

Which country possesses the world's largest economy? Why do you think international trade is such a small component of the U.S. economy?
 
  What will be an ideal response?

Question 2

The sale of a Mercedes-Benz from Germany to France would be recorded as a merchandise export in the ________ account of Germany's balance of payments.
 
  A) capital
  B) current
  C) official reserves
  D) export

[Qarqy]

Answer to Question 1

The United States has the world's largest economy, accounting for almost 21 percent of the world's GDP. Although international trade has become increasingly more important during the past decade, it is a relatively small component of the U.S. economy. U.S. exports of goods and services in 2012 totaled 2.9 trillion but were only 14 percent of its GDP. However, this figure is somewhat misleading. Because of the country's large size, trade that might be counted as international in smaller countries is considered domestic in the United States. For example, the
money spent for a hotel room in neighboring Belgium by a Dutch motorist trapped in a thunderstorm 50 miles from home late at night is counted in the international trade statistics of both Belgium and the Netherlands. A similar expenditure by a Connecticut motorist stuck in New Jersey after watching a football game at the Meadowlands is a purely domestic transaction.

Answer to Question 2

B