The Following Table Identifies the Real Value of Exports, Imports

question 67

Essay

The following table identifies the real value of exports, imports, and gross domestic product GDP) for a country for three different years, measured in billions of dollars. $$\begin{array} { l l l l } \hline \text { Year } & \text { Exports } & \text { Imports } & \text { GDP } \\\hline 1990 & 434.00 & 400.00 & 2,170.00 \\2000 & 499.10 & 480.00 & 2,712.50 \\2010 & 459.01 & 560.00 & 3,255.00 \\\hline\end{array}$$
a. During this time period, what has happened to exports and imports as a percentage of GDP? Calculate the values.
b. During this time period, what has happened to the trade balance? Calculate the values.
c. Provide a plausible explanation for why the values might have changed in the way they did.

---

Definitions:

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees, affecting the net proceeds from the offering.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date.

Bought Deals

An arrangement in which an investment bank buys an entire new issue of securities from a company and resells it to investors.

Underwriters

Entities or individuals that evaluate and assume the risk associated with financial transactions, often seen in insurance and investment banking.