Why are exports added to GDP?
Answer and explanation
Correct answer: Because they are final goods produced within domestic territory
Exports are goods and services produced within the domestic economic territory but purchased by residents of other countries. Since GDP records production within domestic borders, the value of exports must be included. In the expenditure identity, exports are added and imports are subtracted, giving net exports (X − M) and ensuring that only domestic production is measured.
Frequently asked questions
What is the correct answer to this question?
Because they are final goods produced within domestic territory
Why is this the correct answer?
Exports are goods and services produced within the domestic economic territory but purchased by residents of other countries. Since GDP records production within domestic borders, the value of exports must be included. In the expenditure identity, exports are added and imports are subtracted, giving net exports (X − M) and ensuring that only domestic production is measured.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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