How to find net exports
AP Macroeconomics · Learn by Concept
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AP Macroeconomics › How to find net exports
A depreciation in the value of a nation's currency will lead to what?
Higher exports
Higher imports
An increase in tax revenue
An increase in wages
Explanation
A devaluation of a currency makes a nation's goods cost less to holders of foreign currency. Since the goods are now cheaper, there will be an increase in the quantity of goods demanded by holders of foreign currency. More foreigners buying goods means those goods must be shipped to them leading to an increase in exports.
A trade surplus results from a country having __________.
more net exports than net imports
more net imports than net exports
net exports that equal more than one half of total GDP
net imports that equal less than one third of total GDP
net imports that exceed the total GDP
Explanation
Net imports describe all goods brought into a country through trade, and net exports describe all goods sold to foreign countries. A trade surplus describes any situation in which net exports are greater than net imports. A trade surplus is a target for most nations.