Page 116 - Macroeconomics. book docx_Neat

= Investment

G = Government spending

X = Exports

M = Imports

Net Exports

Net exports (NX) = X - M

If X > M, the country has a trade surplus.

If X < M, the country has a trade deficit.

Numerical Example 1

If:

C = 500

I = 200

G = 300

X = 150

M = 100

Y = 500 + 200 + 300 + (150 - 100) = 1050

Numerical Example 2

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