The foreign purchases of domestically produced goods (exports) minus the domestic purchases of foreign goods(imports).
- Include goods and services produced abroad(with a minus sign) because the goods and services are included in consumption, investment, and government purchases(with a plus sign).
- When a domestic household, firm, or government buys a good or service from abroad, the purchase reduces net exports, but because it also raises consumption, investment, or government purchases, it does not affect GDP.
- NX = exports - imports
- Exports represent foreign spending on the economy's g&s
- Imports are the portions of C, I, and G that are spend on g&s produced abroad.
8th EditionN. Gregory Mankiw 2nd EditionDavid Anderson, Margaret Ray 9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie