net exports + AD

Question 1

determinants of net exports

Answer 1

-real disposable income abroad: boom abroad, there will be higher demand for British exports
-real disposable income at home: if there is a boom at home, imports will increase
-exchange rate: SPICED
-protectionism: quotas on British exports, decreases exports. quotas on foreign goods, decreases imports
-relative inflation: high relative inflation, British goods more expensive, decrease in exports