Lesson 2.2.5

2.2.5 Net trade (X-M) Quiz: Pearson Edexcel Economics, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.2.5, Net trade (X-M): 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 2: Theme 2: The UK economy – performance and policies, written with Revision Ninja.

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The 20 questions

  1. How is the net trade component of aggregate demand calculated?

    • Imports minus exports
    • Production minus consumption
    • Exports minus imports
    • Exports plus imports

  2. Which of the following is a non-price factor affecting demand for UK exports?

    • Tariff levels
    • Domestic inflation
    • Exchange rates
    • Product quality

  3. What impact does a rise in UK real income usually have on net trade?

    • Decreases imports
    • Increases imports
    • Eliminates trade deficits
    • Increases exports

  4. What effect does a depreciation of sterling have on export prices for foreign buyers?

    • Makes imports cheaper
    • Makes exports cheaper
    • Makes exports pricier
    • Has zero impact

  5. How does an economic slowdown in trading partner countries affect UK net trade?

    • Increases exports
    • Reduces exports
    • Reduces imports
    • Increases net trade

  6. How does an increase in tariffs and quotas usually affect a country's import volumes?

    • Reduces them
    • Has no effect
    • Eliminates them
    • Increases them

  7. If the euro depreciates by 10% against sterling, what happens to euro export revenues converted to sterling?

    • Falls by 50%
    • Rises by 10%
    • Remains unchanged
    • Falls by 10%

  8. Why might currency appreciation have a minimal short-run impact on the net trade balance?

    • High tariffs
    • Zero trade quotas
    • Inelastic demand
    • Elastic demand

  9. Which of the following is a non-price factor affecting the net trade balance?

    • Product quality
    • Tariff rates
    • Export prices
    • Exchange rates

  10. What is the most likely effect of a rise in real incomes abroad on UK net trade?

    • No impact occurs
    • Net trade improves
    • Net trade worsens
    • Imports rise rapidly

  11. Which aggregate demand component increases directly when total exports exceed total imports?

    • Government expenditure
    • Net trade
    • Investment
    • Consumption

  12. What is the most likely short-run effect of reducing trade protectionism on net trade?

    • Improves net trade
    • No effect
    • Worsens net trade
    • Eliminates imports

  13. If X = 300 billion and M = 340 billion, what is the value of net trade?

    • -640 billion
    • 40 billion
    • -40 billion
    • 640 billion

  14. An economy has consumption of 600, investment of 150, government spending of 200, exports of 180 and imports of 230. What is AD?

    • 1,000
    • 1,130
    • 800
    • 900

  15. Which change directly increases aggregate demand via the net trade component?

    • Higher export volume
    • Lower export volume
    • Higher import tariffs
    • Higher import volume

  16. Which factor is most likely to cause a sustained long-run improvement in net trade?

    • Lower export quality
    • Higher productivity
    • Higher exchange rates
    • Higher domestic inflation

  17. What happens initially to the trade balance according to the J-curve effect after currency depreciation?

    • It stays balanced
    • It reaches equilibrium
    • It improves
    • It deteriorates

  18. Which policy measure is used by governments to increase the degree of protectionism?

    • Free trade agreements
    • Import quotas
    • Deregulation
    • Tax cuts

  19. How is net trade calculated within the components of aggregate demand?

    • Imports minus exports
    • Exports plus imports
    • Consumption minus investment
    • Exports minus imports

  20. If exports fall by £20 billion and imports fall by £25 billion, net trade changes by:

    • +£5 billion
    • +£45 billion
    • -£45 billion
    • -£5 billion

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