Which expression represents net exports (NX) in the expenditure method?
Answer and explanation
Correct answer: Difference between exports and imports
Net exports are represented by NX = X − M, where X means exports and M means imports. Exports are spending by foreigners on domestically produced goods and services, while imports are deducted because they are included in domestic expenditure but were produced abroad. Therefore, the difference between exports and imports is correct.
Frequently asked questions
What is the correct answer to this question?
Difference between exports and imports
Why is this the correct answer?
Net exports are represented by NX = X − M, where X means exports and M means imports. Exports are spending by foreigners on domestically produced goods and services, while imports are deducted because they are included in domestic expenditure but were produced abroad. Therefore, the difference between exports and imports is correct.
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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