Understanding the Japanese Economy (Research Exercises for Students)

Exercise 1: Comparative Size of the Japanese Economy

Every economy produces a wide variety of things. Economists usually divide economic production into goods (cars, televisions, gasoline, food) and services (insurance, legal advice, entertainment, education). The total amount of goods and services produced within a country during the course of a year is called the Gross Domestic Product (GDP). The GDP translates the value of all things produced in an economy into money, which makes it possible to compare the size of one country's economy with that of another.

Find statistics or a graph to illustrate the size of Japan's economy (or Gross Domestic Product — GDP) in comparison with the economies of other large market economies. Try to find statistics for the United States, Germany, France, Italy and Great Britain. [Start with the OECD Statistics Portal]


  1. What does GDP measure?
  2. The United States' economy is the world's largest. What is Japan's ranking?
  3. What else would you have to know about Japan to know how the size of Japan's economy affects such things as the standard of living of the population?

Exercise 2: Comparative Growth of the Japanese Economy

Thirty years ago, all of the goods and services produced in the United States each year (the GDP of the economy) amounted to much more than those produced by Germany, France, Britain or Japan. Between 1950 and 1995, although the U.S. economy continued to grow, the economies of these other countries grew at a faster rate. By 1995, the U.S. economy was still the largest, but other countries had begun to catch up. Japan was the fastest growing country for almost thirty years. However, the Japanese economy started to slow from 1990 to 1995. In fact, in 1998, the Japanese economy will probably shrink for the first time since the early 1970s. When an economy has negative growth, for half of a year, it is called a recession.

Find statistics or a graph to illustrate the amount of goods and services produced in Japan, France, Germany and the United States in the last forty years. [Start with the OECD Statistics Portal]


  1. Which of the four countries had the smallest economies in 1950? What percent of U.S. production did this represent?
  2. Which country's economy is the largest next to the United States in 1998?
  3. Which country had the largest economy in 1995 (other than the United States)? Which was the smallest?
  4. Which economy grew the most between 1951 and 1995?

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Exercise 3: Japan's GDP in Comparison

In addition to knowing how large a country's economy is or how fast it is growing, economists like to relate this to the size of the country's population. Economists divide the total economic production in one year (GNP) by the number of people in the country (the population) to get the amount of production per person, called the GNP per person (or per capita, meaning "per head").

Find statistics or a graph that illustrates the GDP per person in various countries. (Canada, Mexico, The Unite States, Japan, Korea, Australia etc.) GDP per person measures per capital income in terms of what a person in each of the countries can buy with his or her income. Since prices may be higher in Japan than in other countries, this Purchasing Power Parity measure gives us a much better idea of how well off the average Japanese person is compared to citizens of other industrialized countries. [Start with the OECD Statistics Portal]


  1. What does "per capita" mean?
  2. Of the countries you found, which has the largest GDP per person?
  3. If you rank these countries, beginning with the one with the largest income per person and ending with the smallest, what is Japan's rank?

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Exercise 4: Structure of Economy: Employment Sectors

Economists determine how advanced an economy is by comparing how many people work in agriculture, industry, or services (such as stores, insurance companies, television and radio stations, railways and airlines, or government offices.) According to economic theory, economies become more technologically advanced in stages: All societies begin as agricultural societies, where most people are involved in growing food to eat (an agricultural society.)

With the introduction of fertilizers, better seeds, and farm machinery, food production becomes more efficient. Greater numbers of people are then able to move away from farms to work in industry (in industrial society). At the same time, as people's incomes rise, they spend more money on goods produced by industry.

As manufacturing becomes highly productive through the use of more sophisticated machines (computers and robots included), more people leave manufacturing industries to work in service industries. This again corresponds with a greater demand for services by the people.

An "advanced economy" is one in which the service industries employ most of the people, due to a combination of a shift in consumer demand and changes in the production efficiency of agriculture and industry.

Find statistics or a graph to illustrate how many people are employed in agriculture, industry or services in various countries including Japan. (France, Germany, Italy, the United Kingdom, the United States and China would provide a useful comparison.) [Start with the OECD Statistics Portal]


  1. Which section of the economy employed the fewest number of people each country?
  2. Which employed the most?
  3. How do economists measure how "advanced" a country's economy is?
  4. According to the definition of an "advanced" economy used by some economists, to what extent do these countries all have advanced economies? Explain.
  5. Rank the countries from most advanced to least advanced.
  6. How would you draw the profile of an economy much less advanced?

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Exercise 5: Comparative Size of Japan's Population

In comparison to the land area of the United States, the Japanese islands account for a relatively small land area (about the size of Montana or California), but in comparison to the many nations of Europe, Japan is about average. Japan's population, however, is very large: Japan is the eighth most populist country in the world.

Japan's relatively small land area, coupled with its large population results in high population density. Also, Japan's land area is not only small, but very mountainous. Mountains cover four-fifths of the land. Cities and farms compete for the small amount of land that is flat.

Find statistics illustrating the world's ten most populous countries. Then look for population density for these countries. [Start with the Japanese Government Statistics Bureau Website]


  1. What can you say about the relative sizes of the United States and Japan?
  2. How does Japan's population density compare with other nations?

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Exercise 6: Japan's Food Imports/American Food Exports

Traditionally, Japanese eat little meat, using fish and soybeans as sources of protein. Tofu, soy sauce, and miso bean paste are all made from soybeans. As a staple, Japanese now eat an increasing amount of noodles and bread as well as rice. Noodles and bread are both made from wheat.

Find statistics to illustrate which foods Japan imports. Also look for the sources of these imports. Then look for information about the markets for American Food Exports. [Start with the Japanese Government Statistics Bureau Website]


  1. What percent of soybeans does Japan import?
  2. What percent of the wheat used to make noodles and bread is imported?
  3. What reasons can you give to explain why Japan must import food?
  4. Which countries import the largest amounts of American products?

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Exercise 7: Japan's Energy Imports in Comparison

For Industry, every country must have raw materials that can be used to build factories and machinery and make products. In addition to oil, some important raw materials are coal, iron ore, copper, aluminum, and wood. If a country does not have these resources, it must import them from other countries.

Japan's domestic energy sources are small, mostly hydroelectric power and coal. As Japan's economy has grown, it has needed to buy (import) vast quantities of energy, particularly oil and coal, from other countries.

Find statistics to illustrate what percentage of energy needs are imported by the following countries: Japan, China, Germany, Russia, the United Kingdom and the United States. [Start with the Japanese Government Statistics Bureau Website]


  1. Rank the six countries according to the degree to which they are dependent on imports for their energy needs. (Rank them from most dependent to least dependent.)
  2. What rank is Japan?
  3. How do you think Japan's efforts at energy conservation and the development of alternative energy sources will affect Japan's dependence on imported energy in the future?

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Exercise 8: Japan's Imports and Exports by Region

While the trade between the United States and Japan is important for both countries, Japan also trades increasing amounts of goods with other Asian countries and other places around the world.

Find statistics that illustrates what percentage of Japan's imports come from Asia, Europe, North American, South American and Africa. What percentage of Japan's exports go to these regions. Also look for the contents of these imports and exports. [Start with the Japanese Government Statistics Bureau Website]


  1. Which item accounts for the greatest portion of Japan's exports?
  2. Which item accounts for the greatest portion of Japan's imports?
  3. Which regions buy the greatest portion of Japan's exports? Explain this in terms of the type of goods Japan exports.
  4. From which area of the world does Japan buy the greatest portions of its imports? Explain this in terms of the type of goods Japan imports.

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