Question

In the expenditure approach to calculating GDP, what is the formula for GDP?

A GDP = C + I + G + (X - M) Correct Answer Incorrect Answer
B GDP = C + I + G - (X - M) Correct Answer Incorrect Answer
C GDP = C - I + G + (X + M) Correct Answer Incorrect Answer
D GDP = C - I - G + (X - M) Correct Answer Incorrect Answer
E GDP = C + I - G - (X + M) Correct Answer Incorrect Answer

Solution

This is the correct formula for GDP in the expenditure approach, where GDP is the sum of consumption (C), investment (I), government spending (G), and net exports (exports - imports, denoted as X - M).

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