Question

Net exports can be defined as:

A) exports minus imports.
B) exports divided by imports.
C) imports divided by exports.
D) imports minus exports.
E) exports plus imports.

Answer 1

Net exports can be defined as exports minus imports. The formula for calculating net exports is (X - M). A trade surplus occurs when exports exceed imports.

Step-by-step explanation:

Net exports can be defined as exports minus imports. It is the gap between the dollar value of exports (X) and the dollar value of imports (M). The formula for calculating net exports is (X - M). If a country's exports are larger than its imports, it has a trade surplus, while if imports exceed exports, it has a trade deficit.