When dealing with international trade, economists include net exports as a component of GDP.
What are net exports?
- Net exports of goods and services is the difference between U.S. exports of goods and services and U.S. imports of goods and services.
- Exports measures the portion of total U.S. production of goods and services—gross domestic product (GDP)—that is provided to the rest of the world; thus, movements in exports reflect changes in foreign demand for U.S.-produced goods and services.
- Imports measures the portion of total U.S. expenditures—gross domestic purchases—that is accounted for by goods and services provided by the rest of the world; thus, movements in imports reflect changes in domestic demand for foreign-produced goods and services.
- The impact of imports on the U.S. economy depends on the degree to which they act as substitutes for or as complements to domestic production.
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