Net exports equal exports minus imports. Net exports equal imports minus exports. A trade surplus is the same as positive net exports. A budget deficit exists when federal revenues exceed federal spending. Households sell the factors of production in exchange for money payments.
Firms buy the factors of production from households.
The value of output must equal the value of income. The value of input must equal the value of household income. Money that is saved by households reenters the economy in the form of investment spending. Business Firms 1. The International Sector 1.