Why does a country's net exports need to be part of the calculation of the country's GDP?
A) Both imports and exports need to be subtracted because both are produced abroad even though purchased within the country.
B) Both imports and exports need to be added into GDP because both are part of the country's output even though imports are sold abroad.
C) Exports are part of the country's production that need to be counted. Imports are part of the country's purchases but need to be subtracted because they are not part of the country's output.
D) Exports are not part of the country's production and need to be subtracted. Imports are part of the country's production and need to be included.

Question

Quizplus · Accepted Answer

Exports are added to GDP because they are produced domestically and sold abroad, contributing to a country's output. Imports are subtracted from GDP because they are produced abroad and do not contribute to the domestic country's output, even though they are consumed domestically.

Why Does a Country's Net Exports Need to Be Part