Comparative and Absolute Advantage Germany Population: 81,197,537 (2015) Population percentage of total EU: 16% (2015) Political system: Democratic, federal parliamentary republic Currency: Euro Economy: Social market economy Production: Automobiles, machinery, chemicals and household equipment Population: 81,197,537 (2015) and has the largest population of any EU country. Stretches from the North Sea and the Baltic to the Alps in the south and has a vast amount of major rivers such as the Rhine, Danube and Elbe (Eubusiness, 2018). Population percentage of total EU: 16% (2015) Political system: Democratic, federal parliamentary republic. The lawmakers are called the Bundestag and are elected every four years by popular vote (Eubusiness, 2018). Currency: Euro Economy: Social market economy, the fifth largest economy in the world in Purchasing Power Parity terms and is Europe’s largest economy. Production: Automobiles, engineering products, iron, steel, coal, textiles, electronic and communications equipement, chemicals and pharmaceuticals. Second largest producer of hops worldwide and is well known for their beers and wine. (Eubusiness, 2018). Top 3 trade partners (2016): China, United States, and France (Eubusiness, 2018). 2 Germany’s Real GDP Real GDP first quarter 2018 739, 896.7 Millions of Chained 2010 Euros First quarter 2009 615,666.8 Millions of Chained 2010 Euros (Federal Reserve Bank of St. Louis, 2018) 3 Germany's Real GDP First Quarter 2009 Category 1 615666.80000000005 First Quarter 2018 Category 1 739896.7 Chained 2010 Euros Germany’s GDP Percentage Composition Agriculture- milk, pork, beef, cereals, potatoes, wheat. Southern and western Germany are known for their wine. Bavaria produces much of the countries beer production. Services- the construction industry, wholesale and retail, logistics, consulting industry, financial services, the hotel and catering industry, real estate, health servides, creative industry, education and public services. Industry- machine tools, solar power and turbine wind power, electrical engineering, iron, steel, chemicals and optics. Manufacturing- automotive, household products (The World Bank Data, 2018) 4 Germany’s Consumer Price Index Germany CPI Annual 2009 98.90000 Index 2010=100 Annual 2017 109.27500 Index 2010=100 (FRED, 2018) 5 Germany's Annual CPI 2009 98.9 2017 109.27500000000001 INDEX 2010=100 Germany’s Real Exports Germany Real Exports 1st Quarter 2018 136.92659 Index 2010=100 Seasonally Adjusted 1st Quarter 2009 85.38521 Index 2010=100 Seasonally Adjusted (Federal Reserve Bank of St. Louis, 2018) Top ten exports in 2017 Vehicles: US$257.2 billion (17.8% of total exports) Machinery including computers: $245.4 billion (17%) Electrical machinery, equipment: $148.8 billion (10.3%) Pharmaceuticals: $84.1 billion (5.8%) Optical, technical, medical apparatus: $72.8 billion (5%) Plastics, plastic articles: $63.6 billion (4.4%) Aircraft, .

1. Comparative and Absolute Advantage
Germany
Population: 81,197,537 (2015)
Population percentage of total EU: 16% (2015)
Political system: Democratic, federal parliamentary republic
Currency: Euro
Economy: Social market economy
Production: Automobiles, machinery, chemicals and
household equipment
Population: 81,197,537 (2015) and has the largest population of
any EU country. Stretches from the North Sea and the Baltic to
the Alps in the south and has a vast amount of major rivers such
as the Rhine, Danube and Elbe (Eubusiness, 2018).
Population percentage of total EU: 16% (2015)
Political system: Democratic, federal parliamentary republic.
The lawmakers are called the Bundestag and are elected every
four years by popular vote (Eubusiness, 2018).
Currency: Euro
Economy: Social market economy, the fifth largest economy in
the world in Purchasing Power Parity terms and is Europe’s
largest economy.
Production: Automobiles, engineering products, iron, steel,
coal, textiles, electronic and communications equipement,
chemicals and pharmaceuticals. Second largest producer of hops
worldwide and is well known for their beers and wine.
(Eubusiness, 2018).
Top 3 trade partners (2016): China, United States, and France

2. (Eubusiness, 2018).
2
Germany’s Real GDP
Real GDP first quarter 2018
739, 896.7 Millions of Chained 2010 Euros
First quarter 2009
615,666.8 Millions of Chained 2010 Euros
(Federal Reserve Bank of St. Louis, 2018)
3
Germany's Real GDP
First Quarter 2009
Category 1 615666.80000000005 First Quarter 2018
Category 1 739896.7
Chained 2010 Euros
Germany’s GDP Percentage Composition
Agriculture- milk, pork, beef, cereals, potatoes, wheat. Southern
and western Germany are known for their wine. Bavaria
produces much of the countries beer production.
Services- the construction industry, wholesale and retail,

3. logistics, consulting industry, financial services, the hotel and
catering industry, real estate, health servides, creative industry,
education and public services.
Industry- machine tools, solar power and turbine wind power,
electrical engineering, iron, steel, chemicals and optics.
Manufacturing- automotive, household products
(The World Bank Data, 2018)
4
Germany’s Consumer Price Index
Germany CPI
Annual 2009
98.90000 Index 2010=100
Annual 2017
109.27500 Index 2010=100
(FRED, 2018)
5
Germany's Annual CPI
2009
98.9 2017
109.27500000000001
INDEX 2010=100

4. Germany’s Real Exports
Germany Real Exports
1st Quarter 2018
136.92659 Index 2010=100 Seasonally Adjusted
1st Quarter 2009
85.38521 Index 2010=100 Seasonally Adjusted
(Federal Reserve Bank of St. Louis, 2018)
Top ten exports in 2017
Vehicles: US$257.2 billion (17.8% of total exports)
Machinery including computers: $245.4 billion (17%)
Electrical machinery, equipment: $148.8 billion (10.3%)
Pharmaceuticals: $84.1 billion (5.8%)
Optical, technical, medical apparatus: $72.8 billion (5%)
Plastics, plastic articles: $63.6 billion (4.4%)
Aircraft, spacecraft: $41.8 billion (2.9%)
Articles of iron or steel: $30.5 billion (2.1%)
Mineral fuels including oil: $26.8 billion (1.9%)
Iron, steel: $26.4 billion (1.8%)
(Eubusiness, 2018)
6
Germany's Real Exports
First Quarter 2009
85.385210000000001 First Quarter 2018
136.92659
Quarterly
Index 2010=100
Seasonally Adjusted

5. Germany’s Real Imports
Germany Real Imports of Goods and Services
1st Quarter 2018
133.67081 Index 2010=100 Seasonally Adjusted
1st Quarter 2009
90.34226 Index 2010=100 Seasonally Adjusted
(The World Bank Data, 2018)
Top 10 Imports of 2017
Machinery including computers: US$148.5 billion (12.7% of
total imports)
Electrical machinery, equipment: $145.7 billion (12.5%)
Vehicles : $123.2 billion (10.5%)
Mineral fuels including oil: $96.2 billion (8.2%)
Pharmaceuticals: $53.6 billion (4.6%)
Plastics, plastic articles: $44.4 billion (3.8%)
Optical, technical, medical apparatus: $40.3 billion (3.4%)
Organic chemicals: $34.1 billion (2.9%)
Iron, steel: $29 billion (2.5%)
Articles of iron or steel: $23.3 billion (2%)
(Eubusiness, 2018)
7
Germany's Real Imports
First Quarter 2009
Quarterly 90.342259999999996 First Quarter 2018
Quarterly 133.67080999999999
Index 2010=100
Seasonally Adjusted

6. Germany’s Unemployment Rate
2018 Unemployment Rate
5.3%
2009 Unemployment Rate
8.1%
(Statista, 2018)
8
Germany's Unemployment Rate
2009 Year 8.1000000000000003E-2 2018 Year
5.2999999999999999E-2
Unemployment Percentages
Germany’s Industrial Production
Industrial Production
May 2018
3.14%
December 2009
-16.3%
(CEIC Data, 2018)
9
Germany's Industrial Production

7. 2009
-0.16300000000000001 2018
3.1399999999999997E-2
Percentage of Production
References
CEIC Data. (2018). Germany Industrial Production. Retrieved
from
https://www.ceicdata.com/en/indicator/germany/industrial-
production- index-growth
Eubusiness. (2018). Germany: country overview. Retrieved
from https://www.eubusiness.com/europe/germany
Federal Reserve Bank of St. Louis. (2018). Real Gross Domestic
Product for Germany. Retrieved from
https://fred.stlouisfed.org/series/CLVMNACSCAB1GQDE
Federal Reserve Bank of St. Louis. (2018). Exports of Goods
and Services for Germany. Retrieved from
https://fred.stlouisfed.org/series/NAEXKP06DEQ661S
FRED. (2018). Consumer Price Index of All Items in Germany.
Retrieved from
https://fred.stlouisfed.org/series/DEUCPIALLMINMEI#0
Statista. (2018). Germany Unemployment Rate. Retrieved from
https://www.statista.com/statistics/227005/unemployment-
rate-in-germany/
The World Bank Data. (2018). Imports of Goods and Services
Germany. Retrieved from
https://data.worldbank.org/indicator/BM.GSR.TOTL.CD?lo
cations=DE&view=chart

8. References Cont.
CEIC. (2018). United Kingdom Industrial Production Index
Growth. Retrieved from: https://www.ceicdata.com/en.
Federal Reserve Bank of St. Louis. (2018). Economic Research,
Consumer Price Index of all Items in the United Kingdom.
Retrieved from:
https:/fred/stlouisfed.org/series//GBRCPIALLMINMEI.
FocusEconomics. (2018). Gross Domestic Product in United
Kingdom. Retrieved from:
McConnell, C.R., Brue, S.L., & Flynn, S.M. (2015) Economics:
Principles, problems, and policies (20th ed). Boston, MA:
McGraw- Hill/Irwin.
Organization for Economic Co-operation and Development,
Production of Total Industry in France [FRAPROINDQISMEI],
retrieved from FRED, Federal Reserve Bank of St. Louis;
https://fred.stlouisfed.org/series/FRAPROINDQISMEI,
September 9, 2018.
Organization for Economic Co-operation and Development,
Unemployment Rate: Aged 15-74: All Persons for France
[LRUN74TTFRQ156N], retrieved from FRED, Federal
Reserve Bank of St. Louis;
https://fred.stlouisfed.org/series/LRUN74TTFRQ156N,
September 7, 2018.
Statista. (2018). United Kingdom: Real Gross Domestic Product
(GDP) growth rate from 2012 to 2022 (compared to previous
year). Retrieved from: https:
statista.com/statistics/263613/gross-domestic-product-gdp-
growth-rate-in-the-united- kingdom/.
Statist. (2018). United Kingdom: Unemployment Rate in the
United Kingdom (UK) from 2000 to 2017. Retrieved from:
https://www.statista.com/statistics/279898/unemployment-
rate-in-the-united-kingdom-uk/.
The World Bank. (2018). Exports of Goods and Services United
Kingdom.
The World Bank Data. (2018). Imports of Goods and Services

9. United Kingdom. Retrieved from
https://data.worldbank.org/indicator/BM.GSR.TOTL.CD?lo
cations=DE&view=chart
1
10Comparative and Absolute Advantage
ECO/561
2017Comparative and Absolute Advantage
Comparative and absolute advantage of products, help influence
the national output for a nation. Understanding the difference
between these and the type of advantage a nation has will help
to show the overall economic growth of each country. Knowing
where the nation falls in the business lifecycle can help to
forecast future economic growth and what needs to be done in
order to achieve that economic growth. This paper compares
four countries and the GDP and lifecycle stages for those
countries in order to show the economic growth for each nation.
Measures of Economic Growth/Comparative and Absolute
Advantage
GDP 2016 data from Tradingeconomics.com, show the ranking
of the following countries. Based on the 2016 numbers, only
China and the United States (U.S.) show positive changes
(increase) in GDP compared to previous measurements;
whereas, the Democratic Republic of Congo and Saudi Arabia
show a decrease.
China’s continued growth since opening doors to economic
reforms in 1978 “lifted 500 million Chinese out of poverty,”

10. and in 2012 the country hit a trade surplus of $319.92 million
(Jain, 2014). Scholarly studies state China’s cheap labor
continues to be its comparative advantage (Chun, 2014). China
bases absolute power on low-cost manufacturing of products. In
comparison, articles state the relative benefit of the U.S is the
ability to attract higher paying jobs (Strosko, 2016); whereas
absolute position is in the production of wheat. The Democratic
Republic of Congo's natural resource is its comparative
advantage, and its agricultural products are the country's
absolute position. As far as Saudi Arabia, comparative and
absolute advantage is the oil reserves.
Economic, Political, and Cultural Development Research
The U.S. has the most technologically powerful economy in the
world, with a per capita GDP of $54,800. In the hierarchy,
Congress makes the laws. As stated by the author Claude
Fischer, “the United States cultural can be captured by the word
more (Fischer, 2010).” Mr. Fischer further states that “Modern
Americans have more of almost everything: more time on Earth,
more wealth, more things, more information, more power, more
acquaintances, and so many more choices (Fischer, 2010).” One
could say that the American cultural has evolved at a high rate
of speed over time.
China currently is considered the largest exporter in the world.
However, it became necessary for China to expand the private
sector and develop a better banking system for international
trade. Based on research in 2015, "China stood as the largest
economy in the world, surpassing the U.S. for the first time in
modern history. China's per capita income is below the global
average (CIA.gov, 2017a)." As of 2015, the world average per
capita income is 10,057.926 (World Bank, 2015). China's
political and cultural development is based on socialism, where
the government has control over the "free" market. As stated in
part, by the staff writer at Independenceday.com, “China is a
socialist country, directed by the people. The worker-peasant

11. union and practicing people's democratic centralism, is the
primary system in the country (Independenceday.com 1999).”
Saudi Arabia's economy has an abundance of oil. The country
possesses about 16% of the world's proven petroleum reserves
(CIA.gov, 2017b). Saudi Arabia is also currently the leading
exporter of said oil. Saudi Arabia's political development is
Islamic, "one nation, one ruler" monarchy. The leader sets
social standards and rules all, including government. The
Democratic Republic of Congo (DRC) is a nation possessing
numerous natural resources. The DRC political development
rests on a Republic government. As stated by the staff writer at
Everyculture.com, "The government is what some have called a
"kleptocratic" dictatorship, in which the constitution and
separate executive, legislative, and judicial branches existed on
paper only (Everyculture.com. 2017).”
Comparison of Country Economic Data
The gross domestic product is perhaps the best way to measure
our national level earnings. It becomes a lot harder to account
for every dollar spent, however some variables that indicate
GDP growth are imports, exports, and wages. Having
understood how the national output generates provides the bases
for how the concept operates, and how products are produced
and how each product is included and/or excluded.
Some variables are wages and employment rate. This helps to
account for the national output. Although the national growth is,
for the most part, healthy since 2008, studies show that the GDP
growth has decreased by two points when contrasted to other
countries like Ireland. In addition, in past years the United
States is in second place, and presently has declined by three
percent. The U.S. GDP generated significant earnings in the
past two years with substantial growth. However, if this was to
be compared to prior years, the last few years show a large

12. decrease. When income is combined, this appears stable and
China appears to be a great competitor, in the long run. China
shows an exponential growth between 2009 and 2050. The
United States will eventually become third in the long-term for
their own Domestic Gross Products earnings due to regulatory
measures by the Central and Federal reserve growth. Between
1972– 2015 data shows an increase from 4.2-15.4. With this
projection the gross domestic is not being excluded
individually. By compounding the data, there should be a better
understanding of how complex data shows the GDP. Although
most data growth since the year of 2008 until 2016 is, for the
most part, the same; the sharpest increase was in the years of
2008 to 17 percent growth. This is 7 points above since 1990
which was 10.5.
Reasons for Varied Economic Growth
The United States’ current growth rate is 1.9% (U. S.
Department of Commerce, BEA & Bureau of Economic
Analysis, n.d.). It has recovered steadily from the 2009
recession. China’s continuous growth rate is 6.8%. This may
give the perception of being the world’s leading economy;
however, when GDP is compared, 2009 numbers show the U.S.
GDP was $15 trillion and China was $5 trillion (Scissors,
2011). Despite having a population four times that of the U.S.,
growth rate depends on trade and the global market for
manufactured products. Saudi Arabia, on the other hand, has
seen a GDP decline to 11% according to 2016 numbers (U.S
Bureau of Economic Analysis, n.d.). This may be due to the
continuing decline in crude oil prices. With 73% of the
government's budget dependent on crude oil prices, Saudi
Arabia’s budget deficit increased (Grennes, Strazds, 2016). The
Democratic Republic of Congo has the potential to become one
of Africa's richest countries. Despite the comprehensive natural
resources, continued political uncertainty has a direct effect on
the economy. Also, the global economic recession saw a

13. decrease in the demand for Congo's minerals (Democratic
Republic of Congo Overview, 2016).
Economic Lifecycle Stages
Economic lifecycle stages fall in four phases of economic
growth and decline: contraction, trough, expansion, and peak.
The economic life cycle of the U.S. is the expansion stage. As
the U.S. is entering a phase where recession is over; and the
country is entering a market of recovery based on the GDP,
income and employment increases. Based on the GDP for Saudi
Arabia, the economic lifecycle is expansion as the GDP is over
3%. However, as the GDP is showing a decline, the expansion
phase could slowly result in a contraction and/or trough as the
GDP declines. China’s economic lifecycle is at peak stage as
the GDP is over 6% change. Finally, the Democratic Republic
of the Congo is in the trough stage. The GDP is nonexistent for
this country.
Products with Comparative/Absolute Advantage
The U.S. has an absolute advantage in trade with certain
agricultural goods and textile products. The U.S. can produce
agricultural products such as corn, for example, more efficiently
than others because of vast land, prime soil and advanced
industry technology. This results in enormous output and
limited inputs, equaling absolute advantage (McConnell, Brue,
& Flynn, 2015). The U.S. has attained comparative advantage in
exporting products such as industry machinery, crude and
refined petroleum, vehicles, and pharmaceuticals. The U.S. has
an extensive list of products earning a solidified comparative
advantage. The U.S. can manufacture large amounts while
limiting opportunity costs because of organic materials,
equipment, technology, etc. (Neary, 2003).
China has earned full advantage with manufactured goods in

14. general when it comes to international trade. China also has
comparative trade advantage with products such as electronics
and vehicles. China has built a strong export business position
primarily because of an extremely low cost of labor. The entire
major manufacturing and production cost reduction has attracted
countries from around the world to have products manufactured
in China. "China's trade pattern is influenced not just by its
overall comparative advantage in labor-intensive goods but also
by geography" (Harrigan, & Deng, 2008, pg. 1). China uses its
local for shipping and distribution of products worldwide to its
maximum advantage.
Saudi Arabia owns global trade absolute advantage in crude oil
and gasoline products. Without a doubt, Saudi Arabia has a
comparative advantage with the trading of polypropylene and
various refined crude oil products. Saudi Arabia not only has an
endless abundance of crude oil natural resources but can
retrieve crude oil in mass quantities and expeditiously faster
than anyone in the world. Saudi Arabia is also thoroughly
proficient in refining crude oil into numerous petroleum based
products for trade export. The country of Saudi Arabia is also
becoming a serious contender and gaining competitive
advantage in the transportation shipping industry (Jasimuddin,
2001).
The Democratic Republic of Congo could but does not have an
absolute advantage in any particular product for international
trade. The Democratic Republic of Congo does have somewhat
of a similar lead with trading products such as diamonds,
copper, timber, and coffee. Although the Democratic Republic
of Congo is plentiful in certain products, the country is in
political turmoil and embellished within the internal conflict.
The current state of corruption leaves the country as a whole
struggling to establish infrastructure and evade common
criticism. The harsh internal retaliation makes it almost
impossible for economic development within the business cycle

15. or advancement within the global market (Eaton, & Kortum,
2002).
Conclusion
Based on the information provided on China, the U.S., Saudi
Arabia, and the Democratic Republic of the Congo, the
economic growth, comparative/absolute advantages, and
lifecycle stages are identified. Comparisons are provided based
on the information gleaned through research. The various
information helps to further identify how the international
economy fluctuates.
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