Use the following terms for this question: C = consumption
I = capital investment spending
G = government spending
X = exports of goods and services
M = imports of goods and services
BOP = balance of payments
GDP = gross domestic product
NPV = net present value
INF = inflation
R = real rate of return
The static equation for the nations GDP is:
A)GDP = C + I + G + (X + M )x INF
B)GDP = C + I + G + X + M
C)GDP = C + I + G + X - M
D)GDP = C + I + X - M + R

Question

Quizplus · Accepted Answer

The static equation for GDP is widely accepted as GDP = C + I + G + (X - M), where C represents consumption spending, I represents capital investment spending, G represents government spending, X represents exports of goods and services, and M represents imports of goods and services. This equation does not include inflation as it is already considered in the calculation of real GDP. Therefore, option C is the correct choice.

Use the Following Terms for This Question: C = Consumption