Refer to the above diagram.In equilibrium net exports are positive.

Question

Quizplus · Accepted Answer

In equilibrium, net exports should be equal to zero. Positive net exports means that the country is exporting more than it is importing, which would lead to an accumulation of foreign currency reserves and a corresponding increase in the value of the country's currency. This would result in a decrease in exports and an increase in imports until net exports equal zero, which is the equilibrium condition.

Refer to the Above Diagram