The correct answer is “c. 25 percent.” This answer accurately reflects the approximate proportion of exports plus imports in the United States as a percentage of its Gross National Product (GNP), which is now commonly referred to as Gross National Income (GNI).

To understand why this answer is correct, let’s delve into the concept of the balance of payments and the role of exports and imports in the U.S. economy, and then examine why the other options are not correct.

Why the Answer Is Correct (Option C – 25 percent):

The United States has a large and dynamic economy that is highly integrated into the global economy. Exports and imports play a significant role in the U.S. economy, and together, they constitute a substantial portion of the country’s Gross National Income (GNI), which is a measure that reflects the total income generated by U.S. residents, both domestically and abroad.

Here are some key reasons why the answer “c. 25 percent” is correct:

1. Global Economic Integration:

The United States is a major player in international trade, with both exports and imports contributing significantly to its economic activity. This reflects the country’s engagement in global markets, as it exports goods and services to countries around the world and imports various products to meet domestic demand.

2. Trade Surplus or Deficit:

The balance of trade (the difference between exports and imports) can vary from year to year. The U.S. has experienced trade deficits in recent years, meaning that imports have exceeded exports. This trade deficit contributes to the proportion of exports plus imports in relation to GNI.

3. Economic Size:

The United States has one of the largest economies in the world, which means that even a relatively modest proportion of exports and imports can represent a substantial absolute value in monetary terms.

4. Economic Diversification:

The U.S. economy is highly diversified, with various sectors, including manufacturing, services, agriculture, and technology, actively engaged in international trade. This diversity contributes to the substantial share of GNI represented by exports and imports.

5. Foreign Direct Investment (FDI):

In addition to trade, the U.S. economy benefits from foreign direct investment, which can also influence the relationship between GNI and exports plus imports. Foreign companies invest in the U.S., contributing to the country’s overall income.

Why the Other Options Are Not Correct:

a. 5 percent:

This option significantly underestimates the role of exports plus imports in the U.S. economy. Such a low percentage would not accurately reflect the importance of international trade and economic integration for the United States.

b. 10 percent:

While 10 percent is higher than 5 percent, it is still too low to represent the true significance of exports plus imports in the U.S. economy. The U.S. relies more heavily on international trade to support its economic activity.

d. 55 percent:

This option overestimates the role of exports plus imports in the U.S. economy. A proportion of 55 percent would suggest that exports and imports are the dominant factors in the country’s GNI, which is not the case. While they are significant, they do not account for over half of the economy’s total income.

In conclusion, the correct answer is “c. 25 percent” because it accurately reflects the substantial role of exports and imports in the United States as a percentage of its GNI.

The U.S. economy is characterized by its global economic integration and diversification, and while the exact figure may vary from year to year, it is clear that exports and imports are vital components of its economic activity.