Chapter 18.1, Problem 4R

To determine

To differentiate: Between export and imports.

Explanation of Solution

Imports: Goods or services that have been purchased from other countries by the home country are referred to as imports. When a country’s imports are more than its exports then the country is said to have negative net exports.

For example, Country A purchases good A from Country B. This means good A has been imported by country A.

Exports: Goods produced in domestic market and sold, or services that have been rendered, by home country to other countries are referred to as exports. When a country’s exports are more than its imports then the country is said to have positive net exports.

For example, Country A purchases good A from Country B. This means good A has been exported by country B.