What effects the economy of a country more?

[nX07]

I am wondering what would effect a countries economy more.. lesser imports coming to the country, or lesser exports going out of the country?

Thanks for any insight.

[Fred Derf Veteran]

Assuming that "T.DOT" represents Toronto then lesser exports affects our economy greater because we are an export nation. Many jobs are tied to the export economy.

[Thread Moved from GD to RWI]

Edited September 12, 2005 by fred666

[nX07]

Oh I see, would that apply to the United States as well?

[Fred Derf Veteran]

Oh I see, would that apply to the United States as well?

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Probably not, the US is an import-based economy. They need raw materials for their own use.

[nX07]

Oh okay,

Thanks alot Fred for helping me out here :)

[dreamz Veteran]

it really depends. borrow a book (or read some articles) about international trade economics and you'll find lots of literature on it. in particular, i want to point you to some key ideas:

-balance of trade. this is a component of gdp and contributes to the calculation of national prosperity. in general, exports bring in money (and increase gdp), while imports send out money (and decrease gdp). in the basic calculation, net imports is exports less imports.

-elasticities (of imports and exports). this can describe relationships between the amount of imports/exports (and their effects) and changes in the exchange rate.

you can also read up on market structures, trade policies, etc.

[+E.Worm Jimmy Subscriber¹]

Assuming that "T.DOT" represents Toronto then lesser imports affects our economy greater because we are an export nation.  Many jobs are tied to the export economy.

[Thread Moved from GD to RWI]

586511763[/snapback]

so you are saying the bacause we are an export economy - less imports have more effect? should it not be less exports, since we need them? or am i mixing something up?

[Fred Derf Veteran]

so you are saying the bacause we are an export economy - less imports have more effect? should it not be less exports, since we need them?

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No, I, er. What.

:blush:

Oh, I guess I better edit that. It wasn't what I meant.

[Osiris]

The answer is lessor exports.

In a basic open economy model exports generate income for your economy, imports are a cost or leakage from it. Whilst less imports might have rammfications for your consumers due to a lessor choice or what not and there are a host of reasons why a countries import levels shrink, lessor exports still mean lessor income.