Question

13. Explain the relationship between net exports and net foreign investment

Answer 1

Answer) Net exports are defined as a the value of a country's total exports minus the value of a country's total imports. Net foreign investment is defined as the total value of investment abroad by domestic people minus domestic investment by foreigners. Foreign investment helps a country's economy by allowing foreign investors to fill investment gaps in manufacturing and infrastructure that may not be met domestically which can be very positive for GDP in open economies.