TRADE/OVERSEAS
Some economic activity in a country is associated with foreign buyers and sellers. Export receipts (X) represent a money flow into a country for goods and sevices sold to overseas buyers. Import payments (M) represent a money flow out of a country for goods and services purchased from overseas producers.
An increase in households' incomes could see an increase in import payments (M) because households decide to take overseas holidays or purchase imported goods and services such as electrical goods or cars. If there is a boom in the global economy, with higher incomes for overseas households, then export receipts can increase, which will have a flow-on effect for producers. Producers may become more confident about the future and move expansion plans forward and invest.