2.2.5: Net trade

• Net trade = exports - imports
• Exports: Goods sold by a country to a foreign country
• Imports: Goods bought by a country from foreign countries
• Influences on net trade balance:

  Higher real income leads to more imports, reducing net trade balance

  Strong currency means imports are cheaper, increasing imports

  High protectionism by the UK government will leads to increased exports

  If quality of UK goods is higher, exports will increase

  If UK goods are more expensive, imports will increase