We know from our reading that changes in net exports is one of four factors that might cause a shift in aggregate demand. So what's happening now? Take a look at the most recent figures from the Federal Reserve on imports and exports: 

https://fred.stlouisfed.org/graph/?g=Rzn8

We know that net exports = exports - imports. What were net exports in the second quarter of 2020? What are net exports for the most recent quarter?

 

Why are imports growing so much faster than exports? Yes, we in the US buy a lot of goods from China and other countries - but that's been true for a long time. What's going on NOW that's causing imports to grow faster than exports?

How might this affect aggregate demand? Which direction will the curve shift?

Answer rating: 100% (QA)

To calculate net exports you subtract imports from exports If imports are growing faster than export... View the full answer