In: Economics
What's the impact of the foreign trade factor ingesting when it joins the revenue-spending model ?
1. The revenue – spending model:-
A revenue expenditure is a formation that is charged to expense as
soon as the cost is appeared. It is the part of government
expenditure that does not result in the alteration of assets,
salaries, wages, pensions, subsidies and interest fall are examples
of revenue expenditure.
The model basically explains that we produce as many goods as will
sell on the market and steady in production and expenditure are
tied to keep an economy.
2. The impact of the foreign Trade :-
The foreign trade has both positive and negative impact on the
income expenditure model. If the foreign trade has positive side it
means exports are greater than imports then the Real GDP increases.
If the foreign trade has negative side it means imports are greater
than exports then the Real GDP falls.
Diagram