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In this video tutorial on aggregate demand, the focus shifts to net exports after discussing consumption, investment, savings, and government spending. Exports are defined as selling goods or services to another country, emphasizing that it is businesses, not countries, that engage in trade. Revenue generated from exporting is considered an injection into the income flow and contributes to the aggregate demand formula (C + I + G + X - M). A key concept introduced is the trade balance, which is the difference between the value of goods and services exported and imported. Understanding this definition is crucial, as many students often misinterpret it.
