Principles of Macroeconomics / Unit 7 MAC 0611 short lesson, about 20 seconds
What Moves Net Exports
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The idea
Net exports move with a few things: incomes here and abroad, relative price levels, the exchange rate, trade policies, and shifts in what buyers prefer.
In practice
When incomes abroad rise, foreigners buy more, so exports rise.
Where people slip
A country's own income rising raises imports, which is why a boom tends to widen a trade deficit and a recession to shrink it.
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