Net Exports

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DEFINITION of 'Net Exports'

The value of a country's total exports minus the value of its total imports. It is used to calculate a country's aggregate expenditures, or GDP, in an open economy.

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BREAKING DOWN 'Net Exports'

In other words, net exports is the amount by which foreign spending on a home country's goods and services exceeds the home country's spending on foreign goods and services. For example, if foreigners buy $200 billion worth of U.S. exports and Americans buy $150 billion worth of foreign imports in a given year, net exports would be positive $50 billion. Factors affecting net exports include prosperity abroad, tariffs and exchange rates.

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RELATED FAQS
  1. How does gross domestic product (GDP) affect standard of living?

    Gross domestic product (GDP) measures the total output of an entire economy by adding up total consumption, investment , ... Read Full Answer >>
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    Net exports, the value of a country's exports minus the value of its imports, tend to be smaller when government deficits ... Read Full Answer >>
  3. What factors cause shifts in aggregate demand?

    Aggregate demand, or AD, is defined as the total amount of goods and services consumers are willing to purchase in a given ... Read Full Answer >>
  4. What is a trade deficit and what effect will it have on the stock market?

    A trade deficit, which is also referred to as net exports, is an economic condition that occurs when a country is importing ... Read Full Answer >>
  5. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>
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