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Class 12EconomicsNational Income and Related AggregatesMethods of calculating national income - Expenditure MethodMediumLevel 19

In which situation will net exports be zero?

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Answer and explanation

Correct answer: When exports equal imports

Net exports are calculated as exports minus imports, or NX = X - M. If the value of exports equals the value of imports, the difference is zero and net exports are zero. Exports greater than imports produce positive net exports, while imports greater than exports produce negative net exports. Imports being zero alone is not sufficient unless exports are also zero.

Tags

net exportsexports and importsopen economyexpenditure methodMethods of calculating national income Expenditure MethodNational Income and Related AggregatesEconomicsClass 12 MCQ

Frequently asked questions

What is the correct answer to this question?

When exports equal imports

Why is this the correct answer?

Net exports are calculated as exports minus imports, or NX = X - M. If the value of exports equals the value of imports, the difference is zero and net exports are zero. Exports greater than imports produce positive net exports, while imports greater than exports produce negative net exports. Imports being zero alone is not sufficient unless exports are also zero.

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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10 more MCQs
  1. 1Studying income, output, and expenditure together in macroeconomics is linked with which idea?
  2. 2On what basis is national income estimated in the expenditure method?
  3. 3Private final consumption expenditure is generally denoted by which symbol in the expenditure method?
  4. 4Investment expenditure is denoted by which symbol in the expenditure method?
  5. 5Government final consumption expenditure is written with which symbol in the expenditure method?
  6. 6What is the difference between exports and imports called?
  7. 7Under the expenditure method, which of the following is classified as gross domestic capital formation?
  8. 8If C = 500, I = 150, G = 200, X = 100 and M = 80, what will be GDP at market price (GDPₘₚ)?
  9. 9Household spending on food, clothing and education falls under which category?
  10. 10Purchase of a new machine is included in which component of the expenditure method?
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