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How can countries have a trade intensity above 100 ?

User Khadreal
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Final answer:

Countries can achieve a trade intensity above 100% by exporting a significant part of their production in relation to their GDP, while maintaining a balance between exports and imports, and by engaging in trade based on comparative advantages.

Step-by-step explanation:

Countries can have a trade intensity above 100 when the value of their exports of goods and services as a share of their Gross Domestic Product (GDP) exceeds 100%. This scenario indicates that a country exports a substantial portion of its production. High trade intensity does not necessarily mean that there is an imbalance between exports and imports, as a country can maintain a near-balance while still engaging in high levels of trade. Additionally, countries with an absolute advantage in production can still benefit from trade by focusing on areas where they have a comparative advantage, leading to mutually beneficial international trade relationships.

User DL Narasimhan
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