lesson 7- exports-imports

Question 1

how much of aggregate demand does (X-M) make up?

Answer 1

(1%)
-import more than we export

Question 2

what is the definition of imports?

Answer 2

goods and services sold to foreigners

Question 3

what is the definition of exports?

Answer 3

goods and services bought from foreigners

Question 4

what are the 6 factors that affect net trade balance (X-M)

Answer 4

Price- higher price, lower quantity demanded.Price of production means more production occurs in cheap countries -> more exports from these LICs to HICs
Real income in the domestic economy- more income means more spending, partially on imported goods.

Exchange rates- rise in pounds value means it costs foreigners more,exports decrease

STATE OF THE WORLDS ECONOMY- if the UKs trading parters are doing well economically, UK exports will rise

DEGREE OF PROTECTIONISM-countries limit X and Ms using tariffs etc,so this affects how many goods enter and leave.

NON PRICE FACTORS- e.g. unique design or service, next day delivery, may increase demand

Question 5

what is the impact of a strong pound
-anagram

Answer 5

Strong
Pound
Imports
Cheaper
Exports
Dearer (expensive)