The four factors that affect consumer spending are consumption, investment, government spending, and net exports.
What is net exports?
- Net exports refers to a measure of a country's total trade.
- The formula used to calculate net exports is simple.
- The value of a country's total exported goods and services minus the value of all imported goods and services equals the country's net exports.
- Net exports = export value – import value where export value = total amount spending abroad on home country goods and services. Import Value = total amount spending in the home country on goods and services imported from abroad.
- Net exports are the difference between a nation's total exports and total imports
- Net exports can be both either positive or negative.
- The net export variable is used to calculate a country's GDP.
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