When imports of a country increase, the GDP of that country will:

Question

Quizplus · Accepted Answer

When imports of a country increase, it means that the country is buying more goods and services from abroad. This leads to an outflow of money from the country, which can reduce the domestic demand for locally produced goods and services, potentially decreasing the Gross Domestic Product (GDP). GDP is calculated as the sum of consumption, investment, government spending, and net exports (exports minus imports). An increase in imports, with all other factors being constant, decreases net exports, thereby decreasing GDP.

When Imports of a Country Increase, the GDP of That