Answer-In national income accounting, Gross Domestic Product (GDP) at market prices is expressed as the sum...

The expenditure approach to GDP is GDP C I G NX, where NX Net Exports Exports X minus Imports M. When exports exceed imports, NX is positive and adds to GDP. When imports exceed exports which is Indias typical position for goods, NX is negative and reduces GDP. The distinction between GDP and GNP is GNP GDP Net Factor Income from Abroad NFIA. NFIA accounts for income earned by residents abroad minus income earned by foreigners within the country. Indias GNP is slightly lower than GDP because MNCs repatriate profits, making NFIA slightly negative.

Question

In national income accounting, Gross Domestic Product (GD

P at market prices is expressed as the sum of final expenditures. Fill in the blanks: GDP = C + I + G + ______, where C = Private Consumption, I = Investment, G = Government Expenditure, and the missing term represents the net contribution of international trade.

A NX, where NX = (Imports minus Exports)

B NX, where NX = (Exports minus Imports)

C NX, where NX = (Exports plus Imports)

D CA, where CA = Current Account Balance including primary and secondary income

E NFIA, where NFIA = Net Factor Income from Abroad

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