1. Influences on net exports
Demand in the UK (real income)
As our economy grows and real incomes rise, consumers buy more of everything, including imports. So imports rise.
Demand in the rest of the world
If growth in other countries is high, their consumers and firms will be buying more of everything, including our exports. So exports will rise.
Exchange rates
If the £ Sterling rises in value, foreign goods are cheaper for UK citizens to buy. So imports will rise. UK goods will also be more expensive for foreigners to buy. So exports will fall.
This has a double whammy effect on (X-M) with both factors working to pull net exports down.

2. Influence on net exports
Non-price factors
Some countries are known for high quality products or for being especially good at particular products. These may be sought after by foreigners, increasing exports.
Eg. The UK is very strong in financial services; Germany is (was)good at cars.
Protection
A country may have restrictions on imports
Tariffs are taxes on imports, so higher tariffs reduce imports
Quotas are restrictions on the quantity of imports
Inflation
If our prices rise faster than prices in the rest of the world, our exports are less competitive and fall. Imports would be cheaper and so we would import more

3. Exchange rates Old exchange rate New exchange rate
Which currency is stronger, which weaker
% change
£1 buys $1.50
$1.65
$1.35
€1 buys $1.20
$1.32
$1 buys 50 Rupees
55 Rupees
$1 buys €0.80
€0.90

4. Marginal propensity to import MPM
Income (Y)
Tax
(T)
Saving
(S)
Imports
(M)
Domestic Cons
-20 20 50 10
-10 40
100 60
150 30 80
200
250
120
300 70
130
What is the MPM between 0 and 250?
Between 0 and 250 what proportion of the increase in income is not spent (withdrawn)?
Household spending (C) is after taxes and saving
Some of the consumption is on imports
In fact in this case 10% of the increase in (gross) income is spent on imports
Overall, 60% of the increase in income is not spent (withdrawn)