The equation representing the final demand approach to calculating GDP is
A)Y = C + I + X + IM.
B)Y = C + I + G.
C)Y = G + I + X − IM.
D)Y = C+ I + G + (X − IM).

Question

Quizplus · Accepted Answer

The final demand approach to calculating GDP includes consumption (C), investment (I), government spending (G), and net exports (exports minus imports, or X-IM). Therefore, the equation that represents this approach is Y = C + I + G + (X - IM), which is option D.

The Equation Representing the Final Demand Approach to Calculating GDP