If imports are greater than exports, what will be the position of net exports?
Answer and explanation
Correct answer: Negative
Net exports are defined as exports minus imports, or X − M. When imports are greater than exports, M is larger than X, so subtracting M from X produces a negative value. Thus net exports are negative. They would be zero only if exports and imports were equal, not merely because both were present.
Frequently asked questions
What is the correct answer to this question?
Negative
Why is this the correct answer?
Net exports are defined as exports minus imports, or X − M. When imports are greater than exports, M is larger than X, so subtracting M from X produces a negative value. Thus net exports are negative. They would be zero only if exports and imports were equal, not merely because both were present.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Methods of calculating national income - Expenditure Method.
