ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A positive net export figure shows a country’s trade surplus. It means that the value of the nation’s imports is lower than the value of its exports. A country with a trade surplus receives more money from a foreign market than it spends. A negative net export figure is a trade deficit for a given country.

Detailed explanation-2: -Anything that changes the value of a currency changes net exports. When a currency appreciates, its goods are more expensive to other countries. When a currency depreciates, its goods are less expensive to other countries.

Detailed explanation-3: -Depreciation of the currency implies that more rupees are required to buy a dollar, or that a dollar can now buy goods worth more rupees than before. Accordingly. exports are expected to increase, while imports will take a hit.

Detailed explanation-4: -Thus, every time the rupee depreciates against the dollar, exporters will be benefitted. (Eg. Software Companies, Consumable items exporters, etc…) But, for importers, depreciation of the rupee is bad.