Question

what is net export function how is it realted to equilibrium GDP . how do foreign GDp and realtive international prices affect the net export function ​

Answer 1

Answer:

Net export is the difference between the value of a country's export versus it's imports. The net export value can be either positive (surplus) or negative (trade deficit). The net export variable is used to compute the GDP of a country. GDP in foreign countries which are trading partners affects the volume of exports of given economy. However, if relative international price change and the goods hitherto exported become relatively costlier, exports will decline thus causing a downward shift in net export function.