According to the national spending approach,imports must be subtracted from all other spending in the economy in the calculation of GDP.

Question

Quizplus · Accepted Answer

This is because imports are goods and services produced in other countries and therefore, spending on imports does not contribute to the production of goods and services within the country. To avoid double counting, imports must be subtracted in the calculation of GDP using the national spending approach.

According to the National Spending Approach,imports Must Be Subtracted from All