This preview shows page 1. Sign up to view the full content.
Unformatted text preview: value of goods and services bought from overseas. Net export is defined as: Net Exports = Exports Imports When income rises, consumers spend more and some of the spending goes to imported goods. Hence, increase in income tends to reduce net export. Net export will increase if export increases and/or import decreases. The net export also depends on income level in foreign countries. If income level in foreign countries increases, they will import more and so export of the country will increase. Other factors affecting net export are exchange rate, price level in own country as well as in foreign countries, interest rate in own country and foreign countries etc. Macro 2 ECON, Student edition pages 131-137 and 142, by William A. McEachern...
View Full Document
- Spring '11