The equation that breaks GDP down by the four sources of aggregate spending is:
A) GDP = C + I + G + X + IM.
B) GDP = C + I + G - X - IM.
C) GDP = C - I - G - X + IM.
D) GDP = C + I + G + X - IM.

Question

Quizplus · Accepted Answer

The equation that breaks GDP down by the four sources of aggregate spending is GDP = C + I + G + X - IM. C represents consumption spending, I represents investment spending, G represents government spending, X represents exports, and IM represents imports. The minus sign in front of IM indicates that imports are subtracted from the other sources of spending, since they are not produced domestically.

The Equation That Breaks GDP Down by the Four Sources