Answer to Question 1
Answers should include the following influences:
(1) literacy level; refers to ability to read and education level of the people in a country; better-educated workers can produce higher quality goods for citizens.
(2) technology; refers to automated production, distribution, and communications systems; better technology allows companies to create and delivery goods, services, and ideas quickly.
(3) agricultural dependency; refers to the proportion of agricultural activity to manufacturing activity; countries that are mostly involved in agriculture do not have the manufacturing base to provide citizens with a large number of quality products.
Answer to Question 2
The balance of trade is the difference between exports and imports. A trade deficit results when imports exceed exports. An ongoing trade deficit creates foreign debt. Foreign debt must be paid from future income, which limits funds available for improving a country's infrastructure and for providing services to citizens in the future.
