From the course: Economic Indicators

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GDP: Net exports/trade

GDP: Net exports/trade

From the course: Economic Indicators

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GDP: Net exports/trade

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- Trade is an important activity for every country, and it impacts your country's growth. Whether you're Russia exporting oil, or you're Germany exporting Mercedes, or you're the United States importing French wine, you have to account for trade when talking about economic growth because gross domestic product, otherwise known as GDP, is the growth from new goods and services that are produced inside the borders of a country. But since countries import and export, it's important to figure out the net amount of what's being exported. Net exports is equal to the exports of a country minus the imports. Net exports can be positive, and that's when the exports of a country are bigger than its imports, but it can also be negative, and that's when imports are bigger than the exports. Positive net exports, when the exports are bigger than the imports, adds positively to GDP of your country. You produced more in your border, and you exported more stuff than you brought in. But negative net…

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