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  Chapter Fourteen:

  Gross Domestic Product
  Business Cycles
  Business Revenues
  Trading Volume
  Dow Jones Average
  Crude Oil
  Energy Consumption
  Imports and Exports
  Foreign Investment



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Imports and Exports

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In the last three decades of the century, U.S. imports and exports increased nearly fivefold, while the trade balance shifted.
In every year from 1900 to 1970, the value of the raw materials and manufactured products exported from the United States exceeded the value of imported goods. In 1971, for the first time in the century, the merchandise trade balance was negative—imports exceeded exports by $9.5 billion, measured in 1999 dollars. The balance was positive again in 1973 and 1975, but every year thereafter the balance was negative. In the last two decades of the century, U.S. merchandise trade, in 1999 dollars, increased 78 percent, while the excess of merchandise imports over exports widened from $52 billion in 1980 to $346 billion in 1999. 

The initial shift from surplus to deficit in the merchandise trade balance was attributable to the oil shock of the early 1970s, which sharply raised the price of imported oil. Subsequent deficits were more strongly influenced by America’s uneven trade relationships with Japan and other Asian countries. 

Imports and exports of services increased as well, as shown in the lower chart. Services include airfares, film royalties, engineering consultations, and insurance premiums, for example. U.S. exports of services first exceeded imports of services in 1971, and the nation maintained this positive balance in services in subsequent decades. The excess of service exports over imports, measured in constant dollars, increased significantly during the last decade of the century, from $28 billion in 1990 to $81 billion in 1999. This positive balance in payments for services partly offsets the negative trade balance in merchandise. 

The overall balance of international transactions also includes transfers of income and capital, government grants, and other intangible items. With everything factored in, the U.S. deficit in its exchanges with other countries was calculated as $46 billion in 1999. Most of the dollars retained by foreigners when these international accounts are settled come back to the United States for the purchase of income-producing assets in this country. Others remain in circulation indefinitely overseas because the U.S. dollar functions as the “reserve currency” for the world economy.

Chapter 14 chart 10

Source Notes
Source Abbreviations

HS series U 187–200. See also International Trade Administration, Office of Trade and Economic Analysis, “U.S. International Trade in Goods and Services,” at (accessed September 1, 2000).


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