Economics Real Vs Nominal Gdp Questions
The trade balance refers to the difference between a country's exports and imports. It affects nominal GDP by influencing the net exports component of GDP. If a country has a trade surplus (exports exceed imports), it will contribute positively to nominal GDP as it represents an increase in domestic production and income. On the other hand, if a country has a trade deficit (imports exceed exports), it will have a negative impact on nominal GDP as it represents a decrease in domestic production and income.