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1. Exports, Imports, Net exports. Trade surplus, trade deficit, trade balance. What factors influence a country’s...

1. Exports, Imports, Net exports. Trade surplus, trade deficit, trade balance. What factors influence a country’s exports? Imports? Net exports(NX)?

2. What is a net capital outflow (NCO)? What factors influence net capital outflow? What can you say about NCO and Net exports? What does national saving equal to in open economy? (S=I+NCO)

3. Define Nominal Exchange rate and real exchange rate. What does it mean when a currency appreciates? How do you calculate real exchange rate and what does it mean that real exchange rate rises?

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Answer #1

1 - The exports in the country are influenced by numerous factors. These can be the political conditions in the country , the level of exchange rate with the importing country , the inflation and demand in the country and the level of capital and labor productivity.

The factors which influence the imports of the country are the political factors . The exchange rate between the exporting and importing country , the marketting , the level of protectionism.

The factors such as the income levels of citizens of the country , the trade policies , the exchange rates , relative price levels and the level of technology affect the net export of the economy

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