Question

Economists call the value of exports minus imports:

A) Net domestic product (NDP).
B) Gross national product (GNP).
C) Net exports (NX).
D) Trade balance.

Answer 1

Economists refer to the value of exports minus imports as 'Net Exports (NX).' This figure also represents the trade balance, indicating a trade surplus if it is positive and a trade deficit if negative. (option c)

Step-by-step explanation:

Economists use several terms to describe different economic indicators. When calculating the demand for domestically produced goods in a global economy, counting spending on exports—goods a country sells abroad—is crucial. It is equally imperative to subtract the spending on imports—goods produced abroad and purchased by residents of the country.

The formula representing this calculation is exports minus imports, which equals the GDP net export component and is conveyed as (X - M), where X represents the dollar value of exports and M the dollar value of imports.

The answer to the question 'Economists call the value of exports minus imports' is Net Exports (NX). The term 'trade balance' also refers to the gap between exports and imports. If exports exceed imports, the country has a trade surplus, while if imports exceed exports, it has a trade deficit.

Hence, the answer is option c