Writing an economics topic essay for a long time was a very difficult tasks for me. I hope you will appreciate my new attempt.
Export includes
goods and services that are produced within a country but later are sold
outside its borders. Gross domestic product is the total revenue that
is generated by a country within a particular year. Gross domestic
product is a sum of various components such as net export of goods and
services, private consumption, government purchases, and gross
investments. Private consumption can be defined as the amount of revenue
that is generated during the sale and purchase of goods and services by
a household (Mankiw, and Taylor 110). Private consumption can also be
referred to as personal consumption; it entails the consumption of both
non-durable and durable products, and services.
The investment component of the gross
domestic product is concerned with the acquisition of goods and services
that will be appreciated in value. Investment activities aim at
increasing the value of a commercial entity or a business individual.
During the determination of gross domestic product, one should be keen
enough to include products and services that have been newly produced,
and exclude those that have been replaced or recycled. Failure to
exclude such items will lead to double count; hence, the economist will
overstate the total gross domestic product (Mankiw 86). Government
spending pertains to all kinds of outflows that are made by the
government. The outflows can be made for purposes of financing the
acquisition of military hardware, and the remuneration of public
servants. However, it is essential to note that this kind of spending is
only included if the outflows are intended for the procurement of the
final products and services. This means that government transfers are
excluded during the calculation of the gross domestic product.
Net exports are determined by
subtracting total exports from total imports. Import includes services
and goods that are produced in foreign economies but later consumed
locally. Such items should be excluded from the calculation of the gross
domestic product because their inclusion will overstate the level of
national supply (Mankiw, and Taylor 107). This paper studies the
relationship between exports and gross domestic product per capita. The
graphs above contain data for the United States of America in the period
between 2001 and 2012. According to the graphs, it is evident that the
amount of exports has been increasing since 2001. It is necessary to
note that the increase has not been extremely steady; there have been
few instances of slight decreases in the level of exports (Data in
Gapminder World n. p.). These decreases in the level of exports did not
have a significant influence on the gross domestic product. In 2009, the
US experienced such decline in the level of exports. From the graph on
gross domestic product per capita, it is clear that the level of gross
domestic product has been increasing steadily since 2001. However,
between 2008 and 2009 there was a significant decline in gross domestic
product per capita. Thereafter, the amount of gross domestic products
generated commences to increase again in the next few years.
From the two graphs, one can notice
interdependence between the gross domestic product per capita and the
level of exports. The two variables have a direct relationship, whereby
an increase in the levels of exports consequently results in an increase
of the gross domestic product. One should note that there are instances
when the level of exports increases or decreases; however, the same
increase or decrease is not reflected on the gross domestic product at
all (Mankiw 89). This is because, in the determination of gross domestic
product, imports have an impact on the net export of a country.
According to the two graphs, the US experienced a rapid decline in
exports and gross domestic products in 2007 and 2009. This is attributed
to the fact that, during this period, the United States of America was
facing the global financial crisis.