2.2.5: Net Trade

Question 1

What is net trade?

Answer 1

• Net trade is total exports minus the total imports

Question 2

How does real income affect net trade?

Answer 2

• When real income is in UK is high, there tends to be increased imports as people demand more goods and services and the UK is unable to meet their needs.
• This will mean that net trade will decrease.

Question 3

How does state of the world economy affect net trade?

Answer 3

• If the UK’s main export country is doing well, then UK exports are likely to rise and so net trade is likely to rise