ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The net exports formula subtracts total exports from total imports (NX = Exports-Imports). The goods and services that an economy makes that are exported to other countries, less the imports that are purchased by domestic consumers, represent a country’s net exports.

Detailed explanation-2: -The net export component of GDP is equal to the value of exports (X) minus the value of imports (M), (X – M). The gap between exports and imports is also called the trade balance. If a country’s exports are larger than its imports, then a country is said to have a trade surplus.

Detailed explanation-3: -GDP Formula GDP = private consumption + gross private investment + government investment + government spending + (exports – imports).

Detailed explanation-4: -Net exports (Xn) included the value of all exports from a country minus the value of all imports. Xn = X-M. If a country has a trade deficit then the value of imports is greater than the value of a country’s exports and net exports (Xn) is negative.

Detailed explanation-5: -GDP = C + I + G + X – M I = Investment expenditure. G = Government expenditure. X = Total exports. M = Total imports.