Explanation:
These goods and services serve as a measure of an economy’s exports to foreign countries and are usually expressed as a percentage of a country’s Gross Domestic Products (GDP). In that way, governments can quantify the exports into a percentage of domestic goods and services, which are purchased by the foreign sector. The value of net exports is calculated by deducting the total value of the goods that an economy imports from the total value of the goods that an economy exports during a specified period, usually a year. When the total value of exports is greater than the total value of imports, an economy has a positive trade balance. Conversely, when the total value of imports exceeds the total value of exports, the economy has a negative trade balance.In a nutshell :
- A nation's net exports are the value of its total exports minus the value of its total imports.
- A positive net export number indicates a trade surplus, while a negative number means a trade deficit.
- A weak currency exchange rate makes a nation's exports more competitive in price.
- Countries with comparative advantages and access to natural resources tend to be net exporters.
- Examples of net exporters are Australia and Saudi Arabia.
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