Question: What if households buy $25,000 toys from China? Would GDP change by calculating production approach,...
Question:
What if households buy $25,000 toys from China? Would GDP change by calculating production approach, expenditure approach, or income and what would happen to NX?
Homework Answers
The GDP can be defined the market value of all goods and services which are produced in the domestic territory of the country in the current financial years.
If households buy $25,000 toys from China, then GDP will decrease by the $25,000 because it is import. This will be calculated by expenditure approach.
Net export= Export- Import
Since import increases by $25,000. Therefore net export will decrease by $25,000.
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What if households buy $25,000 toys from China? Would GDP change
by calculating production approach,...
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