Net exports
Definition. Net exports are the value of a country exports of goods and services minus the value of its imports over a given period, also known as the trade balance. They form a component of aggregate demand and are positive when exports exceed imports.
Net exports are sensitive to the exchange rate, since a depreciation tends to raise them by making exports cheaper and imports dearer, provided the Marshall Lerner condition holds. This is a key channel of exchange rate policy.
This term belongs to Exchange Rate Policy in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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