Why are exports added to (rather than subtracted from) the other expenditure components to arrive at GDP using the expenditure method?
A) because exports account for those goods that were produced in the economy but that were not devoted to domestic consumption, used for domestic investment, or provided as government goods
B) because exports have a higher profit margin for manufacturers than do similar products sold in domestic markets
C) because exported goods are not valued properly, due to problems with the purchasing power parity index
D) because it is only through exporting that we can generate jobs in our own economy

Question

Quizplus · Accepted Answer

Exports are added to the other expenditure components because they represent goods produced in the domestic economy but not used for domestic consumption, investment, or government goods. Including exports in GDP gives a more accurate representation of the overall economic activity of a nation.

Why Are Exports Added to (Rather Than Subtracted From) the Other