In the Equation GDP = C + I + G

question 40

Multiple Choice

In the equation GDP = C + I + G + F, in which F equals net export spending i.e., total spending on exports minus total spending on imports) , imports are subtracted from the other types of expenditures because:

• A) imports reduce national welfare.
• B) other countries do not import goods from the U.S.
• C) the value of imports is included in the other components of spending such as consumption spending.
• D) the value of imports is difficult to determine due to the fact that they are frequently stated in terms of foreign currency.

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