PRC-3 · Chapter 13 · Question 13 of 50
To calculate the Gross Domestic Product (GDP) via the Expenditure Method, an economist sums up Consumer spending (C), Investment (I), Government spending (G), and:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Net Exports (Exports minus Imports) (X-M)
Explanation
The expenditure formula for GDP is C + I + G + (X - M), where (X - M) represents net exports, accounting for spending by foreigners on domestic goods minus domestic spending on foreign goods.
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