Question

The net exports portion of the expenditure approach to computing GDP is composed of: a) Only U.S. spending on both U.S. and foreign goods b) U.S. spending on foreign goods and foreign spending on U.S. goods c) U.S. spending on only U.S. goods d) U.S. and foreign spending on only U.S. goods e) None of the above

Answer 1

Answer:

a) Only U.S. spending on both U.S. and foreign goods 

Explanation:

The expenditure method is the most widely used approach for estimating GDP, which is a measure of the economy's output produced within a country's borders irrespective of who owns the means to production. The GDP under this method is calculated by summing up all of the expenditures made on final goods and services. There are four main aggregate expenditures that go into calculating GDP: consumption by households, investment by businesses, government spending on goods and services, and net exports, which are equal to exports minus imports of goods and services.

Answer 2

Answer:

e) None of the above

Explanation:

Net exports calculates the difference between the number of goods imported and exported. It represents the foreign trade of goods and services within the country.