An open economy's GDP is always given by
A)Y = C + I + G.
B)Y = C + I + G + T.
C)Y = C + I + G + S.
D)Y = C + I + G + NX.

Name: An open economy's GDP is always given by A)Y = C + I + G. B)Y = C + I + G + T. C)Y = C + I + G + S. D)Y = C + I + G + NX.
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Question

Quizplus · Accepted Answer

In an open economy, there is international trade, which means that net exports (NX) need to be added or subtracted from the equation to get an accurate measure of GDP. Therefore, we use the formula Y = C + I + G + NX to calculate an open economy's GDP.

An Open Economy's GDP Is Always Given by