Which of the following is the correct representation of GDP (Y) in an open economy?
A) Y = C + I + G
B) Y = C + I + G + X - M
C) Y = C + I + G + T
D) Y = C + I + G - NX

Question

Quizplus · Accepted Answer

In an open economy, GDP includes exports (X) and subtracts imports (M) from the equation. Therefore, the correct representation of GDP with an open economy is Y = C + I + G + X - M.

Which of the Following Is the Correct Representation of GDP