Economics Economic Indicators Questions
The import/export ratio is a measure that compares the value of a country's imports to its exports. It is calculated by dividing the total value of imports by the total value of exports and multiplying by 100.
The import/export ratio is used as an economic indicator to assess the balance of trade in a country. A high import/export ratio indicates that a country is importing more goods and services than it is exporting, resulting in a trade deficit. This suggests that the country is relying heavily on foreign goods and may have a weaker domestic industry.
On the other hand, a low import/export ratio indicates that a country is exporting more goods and services than it is importing, resulting in a trade surplus. This suggests that the country has a strong domestic industry and is competitive in the global market.
By monitoring changes in the import/export ratio over time, policymakers and economists can gain insights into a country's trade performance, competitiveness, and overall economic health.