A. C+I+G+(X+M)
B. C+I+G+X
C. C+I+G
D. C+I+G+(X-M)
Correct Answer:
Option D = C+I+G+(X-M)
Explanation
The formula to calculate the components of GNP is Y = C + I + G + X + Z. That stands for
GNP = Consumption + Investment + Government + X (net exports, or imports – exports) – Z (net income earned by domestic residents from overseas investments – net income earned by foreign residents from domestic investments)
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