If imports are greater than exports, what will net exports be?
Answer and explanation
Correct answer: Negative
Net exports are calculated as exports minus imports: NX = X − M. When imports are greater than exports, M is larger than X, so the subtraction produces a negative number. Negative net exports indicate that the country has a trade deficit for the period. Net exports would be zero only if exports and imports were exactly equal.
Frequently asked questions
What is the correct answer to this question?
Negative
Why is this the correct answer?
Net exports are calculated as exports minus imports: NX = X − M. When imports are greater than exports, M is larger than X, so the subtraction produces a negative number. Negative net exports indicate that the country has a trade deficit for the period. Net exports would be zero only if exports and imports were exactly equal.
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.
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