.png){kind=logo}
S-1 Solutions Manual to End-of-Chapter Questions 1 / 4
The Global Economy
- Figures 1-2 and 1-6 rely on data from 2010, and Figure 1-5 relies on data from 2005,
- Go to the World Trade Organization’s website at http://www.wto.org, and look
to map worldwide trade, migration, and FDI. Updated data for migration and FDI were not available at the time this chapter was written, but it is available for world- wide trade. In this question, you are asked to update the numbers for world trade shown in Table 1-1.
for its trade data under “Documents and resources” then “International trade statis- tics.” Look for the most recent edition of its International Trade Statistics publication, then go to “Trade by region,” and find the Excel spreadsheet with “Intra- and interregional merchandise trade.” Print out this table. If you cannot find the web- site or spreadsheet, use the 2011 table for “Intra- and Inter-Regional Merchandise Trade” that appears below to answer the following questions.12
- From this table, what is the total amount of trade within Europe? What percent-
age is this of total world trade?
Answer: The total amount of trade within Europe is $4,667 billion. This is
26.2% of the world total trade. (The total world trade is $17,816 billion. Share
= $4,667/17,816 = 26.2%.)
S-3 Destination North South and Middle Origin America Central America Europe CIS* Africa East Asia World World $2,923 $749 $6,881 $530 $538 $672 $5,133 $17,816 North America 1,103 201 382 15 37 63 476 2,282 South and Central America 181 200 138 8 21 18 169 750 Europe 480 119 4,667 234 199 194 639 6,612 Commonwealth of Independent States (CIS) 43 11 409 154 12 24 117 789 Africa 102 19 205 2 77 21 146 594 Middle East 107 10 158 6 38 110 660 1,251 Asia 906 189 922 110 152 242 2,926 5,538
Source: WTO, International Trade Statistices 2012
Intra- and Inter-regional Merchandise Trade, 2011 (Billions of U.S. Dollars) 12 The trade statistics for 2011 were obtained from Table I-4 at: http://www.wto.org/english/res_e/statis_e/its2012_e/ its12_world_trade_e.htm.
1 2 / 4
S-4 Solutions n Chapter 1 The Global Economy
- What is the total amount of trade (in either direction) between Europe and
North America? Add that to the total trade within Europe, and calculate the percentage of this to the world total.
Answer: $(480 1 382) 5 $862 billion. Adding that to intra-European trade, we
obtain 31% of the world total [$(862 + 4667)/$17,816 = 31%].
- What is the total amount of trade within the Americas (i.e., between North
America, Central America, South America, and within each of these regions)?What percentage of total world trade is this?
Answer: $(1,103 + 201 + 181 + 200) = $1,685 billion, or 9.5% of the world
total ($1,685/17,816 = 9.5%).
- What is the total value of exports from Europe and the Americas, and what per-
centage of the world total is this?
Answer: $(2,282 + 750 + 6,612) = $9,644 billion, or 54.1% of the world total
($9,645/17,816 = 54.1%).
- What is the total value of exports from Asia, and what percentage of the world
total is this?
Answer: $5,583 billion, which is 31.1% of the world total.
- What is the total value of exports from the Middle East and the Commonwealth
of Independent States, 13 and what percentage of the world total is this?
Answer: $(789 1 1,251) 5 $2,040 billion, which is 11.45% of the world total
($2,039/17,816 = 11.45%).
- What is the total value of exports from Africa, and what percentage of the world
total is this?
Answer: $594 billion, which is 3.3% of the world total
- How do your answers to (b) through (h) compare with the shares of worldwide
trade shown in Table 1-1?
Answer: The shares computed in (b) through (h) are quite similar to Table 1-1.
The numbers won’t change much as they are one year apart.
- Visit the U.S. Bureau of Economic Analysis at bea.gov to find information for the
latest full calendar year (or for the last four quarters). What is the latest estimate of the size of the annual U.S. current account deficit in billions of dollars?
Answer: The data can be found in Table 1—US International transactions. Based
on the data available as of September 2013, the second and third quarter of 2012 and the first and second quarter of 2013 had current account balances of −106.7, −102.3, −104.9, and −98.9 billion U.S. dollars, respectively. Thus, the one-year estimate is a deficit of 412.8 billion dollars, which is about 61 billion dollars less than for the year 2011 as shown in Table 1-1(12-1).
- Visit oanda.com (or another site with daily exchange rate data) and download data on
the same exchange rates (yuan per dollar and dollar per euro) for the past 12 months.What are the rates today? What were they a year ago? By what percentage amount did the rates change? Do you think the rates are floating or fixed? Why?
Answer: Answers will depend on the latest data update. The yuan per dollar ex-
change rate is fixed (with only occasional changes in its value) and the euro–dollar exchange rate is floating as evident from its wide fluctuations over time.13 The Commonwealth of Independent States consists of: Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, and Ukraine. 3 / 4
Solutions n Chapter 1 The Global Economy S-5 As of September 2013, the weekly average for yuan per U.S. dollar was about 6.14; one year ago it was about 6.34. The yuan has appreciated by about 3.2%. On Sep- tember 22, 2013, the weekly average was 1.34 dollars per euro; one year ago it was
1.29. Thus, dollar depreciated by about 3.8%.
- The data in Figure 1-6 end in the year 2011. Find the IMF’s World Economic
Outlook Databases. (Hint: Try searching “world economic outlook databases.”) Use this full data set to obtain the latest data on current accounts in U.S. dollars for all countries (actual data or IMF estimates). Which countries had the 10 largest deficits last year? Which countries had the 10 largest surpluses last year?Answer: Answers will depend on the latest data update. As of October 2013, the 10
countries with the largest current account deficits were:
Country 2011 2012 2013 United States -457.726 -440.417 -451.458 India -78.154 -88.163 -77.601 Brazil -52.473 -54.231 -74.012 United Kingdom -36.041 -93.866 -69.096 Turkey -75.092 -47.75 -60.661 Canada -48.98 -62.266 -57.092 Australia -34.089 -56.901 -50.34 France -48.996 -57.142 -43.414 Indonesia 1.685 -24.074 -29.578 South Africa -13.62 -24.068 -21.477
The 10 economies with the largest current account surpluses were:
Country 2011 2012 2013 United Arab Emirates 50.949 66.553 59.448 Norway 62.705 70.817 60.773 Japan 119.304 60.446 61.064 Russia 97.274 74.799 61.18 Switzerland 59.082 70.756 68.101 Kuwait 67.175 79.768 72.092 Netherlands 84.86 77.839 86.993 Saudi Arabia 158.582 164.693 138.875 Germany 224.29 238.493 214.596 China 136.097 193.139 223.743
- / 4
.png)