Which of the following statements about exports and imports is true?
A)Both imports and exports are added to a nation's GDP.
B)Both imports and exports are subtracted from a nation's GDP.
C)Imports are added to a nation's GDP; exports are subtracted.
D)Exports are added to a nation's GDP; imports are subtracted.
E)Neither imports nor exports are included in a nation's GDP.

Question

Quizplus · Accepted Answer

Exports are added to a nation's GDP as they represent production within the nation that is sold abroad, while imports are subtracted from a nation's GDP as they represent the consumption of goods produced abroad, which are not part of the nation's production. Therefore, the net effect of exports and imports on a nation's GDP is the difference between exports and imports, which can be positive (surplus) or negative (deficit).

Which of the Following Statements About Exports and Imports Is