Question

When calculating GDP by expenditure method, exports are added or subtracted and imports are subtracted or added?

Answer 1

When calculating GDP by the expenditure method, exports are added and imports are subtracted. This is because GDP measures the total value of goods and services produced within a country's borders, so exports are included in the calculation as they represent goods and services produced domestically and sold to foreign markets. Imports, on the other hand, represent goods and services produced in other countries and consumed domestically, so they are subtracted from the calculation to accurately represent the total value of production within the country.