Syndicate
International Commerce Affects the Economy
Modern countries do very big exchanges with other countries, as a matter a fact these exchanges are so big, that for many countries the importations and exportations are equal to more than fifty percent of their GDP. Due to this it is important to delve a little further into the part of NE of the expenditure equation of the GDP.
Y = C + I + G + NE
Understanding how the international commerce affects the economy is absolutely essential if you expect to have a full understanding of macroeconomy. It is also important because politicians are constantly suggesting policies, such as fees and control of the exchange rate, which have as an objective the international commerce, but whose effects have repercussions all throughout the economy.